The property market was expected to plummet post Brexit, however three months since the vote not much seems to have happened and the market seems to have steadied itself. House prices and rents in London, in general, are continuing to slowly increase and it is predicted they will continue to do so gradually over the next few years.
Bank interest rates are the lowest they have been in years and so buyers are looking to make the most of this if they require a mortgage. The general consensus is that with rates at ongoing record lows and these not likely to increase any time soon, this is a good time for buyers.
However due to the uncertainty as to whether prices could fall again in the short time, some vendors have become Landlords instead, taking their property off the sales market and putting it on the lettings market. The number of new rental properties on the market across prime London rose by 35% in the three months to the end of July.
Nonetheless those who are still selling are holding out for the asking price. There is not much negotiation on price, or as much as people believed there would be.
There has been the typical summer lull and things have been slightly quieter, but we must remember that the market had already slowed prior to Brexit due to the stamp duty and tax changes. In fact many argue the slight decrease in the market is actually caused by the stamp duty changes and not the referendum result at all.
In general, there has not really been a softening in prices for sales or lettings. In London there will always be a greater demand for property than supply. We are becoming a generation of renters, and so there will always be people looking for properties to rent. Lettings volumes are rising and more people than ever are registering with letting agents for property searches. Property viewing figures are up as well as the number of new tenancies agreed. In this sense, rent prices too will continue to rise as competition remains fierce.
Some Landlords are being pragmatic and have slightly reduced rent prices to prevent void periods and they are also being more flexible around break clauses, works to the property, levels of furnishing and payment arrangements.
However, whilst some people might be lucky enough to negotiate themselves a deal, there is always the threat that another prospective Tenant will offer more. Landlords seem willing to hold out for this, to wait and see what happens, even if it means the property being on the market that bit longer. According to Knight Frank’s London Residential Review most transactions have been achieved at or around the asking price.
The Brexit negotiations are likely to go on for a while and until Article 50 is invoked most of the initial uncertainty and shock will die down. As to what will happen once it is invoked and whether this will cause another blip in the market, remains to be seen. But for now, for many, it is business as usual.