I hope you have all had a great start to 2017. There is already plenty to talk about with regards to the Peckham property market, so let’s get started.
I believe Brexit is yet to have a significant impact on the Peckham property market, but while there is political and economic uncertainty, price growth in Peckham is likely to slow or even be slightly negative over the next year or so.
After a few weeks of uncertainty post the Referendum vote, overall property activity did recover but continued to be affected by other factors such as the Stamp Duty changes on second homes and the changes to the tax regime for Buy To Let landlords. If we take a look at the HMRC data for sold properties below: –
From Quarter 1 (Q1) to Quarter 2 (Q2) – Increase 5.70%
From Quarter 2 (Q2) to Quarter 3 (Q3) – Decrease -0.06%
Although there has been a small drop from Q2 to Q3 regarding property prices, this is mainly down to the changes in Stamp Duty and the pending changes to how Landlords are taxed that I mentioned above.
The UK property market has continued to grow strongly with annual price growth set to end this year at 6.91% and the Greater London property market at 7.72%.
Price growth in London was very strong between 2013 to 2015, but there were signs that central London market had gone into negative territory in 2016, and many London Boroughs have been subdued over the last six of months.
Although Peckham has not been overly impacted by what is happening in the Central London property, it is affected by people’s sentiment and confidence. Theresa May gave a positive speech in Davos in January regarding the section 50 notice at the of Q1 2017, and hopefully, this will help clarify the direction we are heading in and give some confidence to people looking to move house.
The changes that have occurred in regards to taxation of landlords continue to subdue the Buy To Let market. It’s a strange policy that the government is pursuing as there is a need for more rental accommodation, manipulating this market will only put upward pressure on rents as fewer Landlords enter the market, and some pull out altogether. I believe the time for significant rent increases is more likely to be 2018, especially as this is when any ban on the fees charged by Lettings Agents to the tenant is likely to come into operation.
So what do I predict will happen to the Peckham housing market in 2017?
There are so many variables to consider, but I do think the market will be flat, maybe even a small drop in property prices of up to 2% over the 12-month period. Once we get to the back end of 2017, I think you will see rents starting to rise as Landlords realise the results of the different tax regime on their cash flow.