In the wake of the vote, uncertainty spread and the media circus isn’t helping with the referendum result becoming a scapegoat for any negative news.
People are obviously concerned house prices will be affected, but we need to stay level-headed; uncertainty is the most dangerous threat to the economy and the property market. Once the dust settles over the next year, a plan is in place and Brexit negotiations begin, we expect the outcome will be considerably more positive than originally thought – we must not let this shock ‘freeze’ us into inaction.
Prior to the referendum there were already concerns that the housing market was overheating. Stamp Duty reforms and taxation changes for buy to let investors were put into action and the Chancellor and the Bank of England gave clear signals of their intention to act further to bring the market back under control. The result of these actions, more than the referendum vote, sees us in a situation of limited housing stock and a reduction in new property to let coming to market.
Contrary to the numerous surveys and reports being published, the only real way to gauge the market is to focus on the fundamentals. Ultimately people need a roof over their head. They still need to buy, sell, let and rent homes, irrespective of the wider political situation. For a long time there has been overwhelmingly more demand than supply and this won’t change any time soon.
A stagnant market won’t help and putting your plans to buy your next home on hold and playing the waiting game is unlikely to make a difference. If you wait for prices to drop, the opposite will be happening.
With the current strong rental growth property purchase continues to be a good investment. There is huge rental demand across London and this will continue; there are more tenants than homes. The only immediate impact we are likely to see as a result of the Brexit vote are rents and property value experiencing a slight short-term dip. But this may already be over; the Royal Institute of Chartered Surveyors reported that confidence is returning to the housing market after a “wobble”. Fundamentally the structure of the property market in London has not, and is unlikely to, change. Both prices and the market will remain stable. Nearly 10 million people are predicted to be living in London by 2024 and given past growth figures there will still be a significant shortfall in housing stock. Our advice remains the same whether you’re a landlord, buyer or seller; keep a cool head and don’t let your plans be thrown off course by the current political situation.