Has Brexit affected house prices?
Has Brexit affected the house prices in Beckenham and surrounding areas? (Summer 2017)
Over a year on from the Brexit vote and market has not collapsed like many had thought. The market has certainly corrected and this is being seen across both sales and rentals markets.
The house market
What we have seen is a market where properties are realistically priced, well presented and marketed effectively will sell. The market we are experiencing is thinner than it was before. This means vendors should be prepared for less viewings. Does this mean vendors should expect reduced offers too? Yes and no!!
Why yes? It is a buyersâ€™ market out there and they know it! Whereas before they would see a property, see a few more and come back to be disappointed it had gone. Now buyers are seeing that properties are not selling at the same pace so are being more measured. This coupled with the fact that some agents are wildly over valuing properties to gain instructions. These are then being reduced drastically but only then to a more realistic value, making the market look like there are more reductions than there should be.
Why no? This all being said, we have agreed a sale for over asking price and another sale where we have received a highest value in the road. However, this type of activity is patchy and isnâ€™t being seen across the board.
So how can you ensure you sell at the optimum price? Initial pricing is key; sellers do tend to get their best prices within the first 4 weeks of marketing. Have a clear marketing strategy on how you and your agent are going to find the right buyers. The right buyers arenâ€™t always the ones with the highest offer! If someone isnâ€™t proceedable their offer is almost worthless anyway!
What if you do get an offer that isnâ€™t quite where you want to be even after doing the above? Ultimately, the prices are dictated by the buyers. So if an offer does come slightly below where you were expecting and demand seems to be at that level, you can see if you can get the onward purchase to take some off to help make it happen!
The flat market
The factor most affecting the sales market is the change in stamp duty and the tax changes to landlords. This has had a massive impact on the sales of flats. The flat market is flat!
Flats were historically bought mainly by first time buyers and investors. However, since the changes we are now relying mainly on the first time buyer; with the larger deposits required and stricter criteria from mortgage companies these are not as plentiful as they have been in the past.
We saw the flat market consisting of approximately 50% first time buyers and 50% investment buyers. However, since the changes we have lost most of the investment buyers.
Another factor are people who may want to keep their flat to let out and have as a retirement nest egg and then go on to buy their family home.
The stamp duty changes mean that people with more than one property will pay increased duty. An example of how much this affects people is:
Scenario 1 â€“ Vendors sell a flat and buy a house at ÂŁ650K – Stamp duty paid is ÂŁ22,500
Scenario 2 â€“ Vendors look to keep their property to let out and buy a house at ÂŁ650k – Stamp duty paid is ÂŁ42,000.
The difference in stamp duty is a massive ÂŁ19,500.00 increase
The market in the South East certainly was becoming over heated, this isnâ€™t good in the long term, and we need steady growth rather than a housing bubble.
We can see the next 12 to 24 months remaining a similar market. Once investors and buyers looking to retain property for their future realise that they may have to pay a little more to get in to the market but interest they will be paying over the terms will be much lower. From there along with how Brexit unfolds we will see more confidence in the market and then see it turn from a buyersâ€™ market back to a sellersâ€™ market.
If you are thinking about moving on to the next chapter in your life and would like a free consultation on what strategy would be best to get you a premium price moving forward then please get in touch with us 0208 650 5875