I’m sure all will agree that it has been a roller-coaster of a summer, from the shock of the referendum decision to Great Britain securing a record medal haul at the Olympics. As the summer fades and life gets back to normal, what next for the property market?
With the referendum hangover clearing and summer fading, we believe it’s now time to switch from reflection to action. The September market has always been a good time to buy or sell, as the end of the hectic summer holiday period encourages homeowners to take stock and make the move they’ve been talking about. Positive August statistics show that, Brexit or no-Brexit, this isn’t going to change.
Data from Martyn Gerrard’s 12 branch network, which covers the prime areas of North and North West London, shows that despite the gloomy outlook many predicted following the referendum, August saw the number of property sales agreed and exchanged on par with those of last August – highlighting that property chains are being re-made and pushed along following the knee jerk reaction of some immediately after the referendum.
When looking at the sharp end, property instructions coming to market are up 31% on August 2015 and represented the largest number of properties coming to the market for that month in six years. However do not panic as according to Zoopla the number of properties coming to the market across the N and NW London postcodes remained steady year on year, with just a 1% increase in those coming to market in 2016.
While supply at Martyn Gerrard has increased in August, the level of demand has also remained high, preventing the market becoming flooded, and keeping prices buoyant. In fact this August saw the second highest number of buyers registering in the past six years.
In terms of sale prices, our latest analysis is fairly balanced and shows that some properties have gone up whilst a percentage have been reduced. However for those reduced I believe that many of those were unrealistically priced in the first place and some, as always, are achieving higher than asking price due to renewed interest. The Office of National Statistics UK price index shows the average price in Outer London in June 2016 stood at £415,854 compared to £359,886 a year ago, showing a rise of 15%. While when you compare the average price compared to June 2006 it has risen a massive 79% from £232,407. Which shows that even with the major shock of the global banking crisis, property has proved a sound investment.
In the rental sphere buy-to-let investors are slowly returning to the market following George Osbourne’s parting shots such as the stamp duty increase, showing that ultimately the property market is still considered a stable and profitable place to invest. Interest rates also remain low, with both three and five year fixed rates able to provide some cost certainty to investors. Some of the exceptional deals available - when going to press - include HSBC, who are offering a 3 year fixed rate at 2.68% (with £749 fee) and 5 year rate of 2.89% (with £1499 fee) for 90% loan to value. For those with a 40% deposit HSBC currently offer a 3 year fixed mortgage at 1.79% (with £749 fee) and 5 year fixed 1.99% (with £749 fee).
Alongside our own positive data on property market activity, much of the predicted post referendum doom and gloom has failed to materialise. The Market/CIPS Purchasing Managers’ Index (PMI), which measures the economic health of the services sector, reported the biggest rebound in the UK services sector in 20 years – a jump that shows the initial shock of the referendum decision has already begun to dissipate. Given that the services sector accounts for 80% of the UK’s economy, the data, which beat many forecasts, is particularly promising.
Encouraged by an often pessimistic and sensationalist media, many both within and outside the property industry had been predicting unprecedented turmoil following June’s referendum decision. However fact has now trumped fiction, and the signs of a healthy market should offer renewed optimism for buyer, seller and investor alike.