After a Tough Summer, is 2016 Set for a Winter Property Renaissance?
It’s no secret that the property world has been heavily impacted by the political landscape of 2016. Both the stamp duty changes and referendum result have rendered the market stagnant throughout the summer, but could hope be on the horizon?
A survey published by RICS this month showed that buyers are slowly beginning to return to the market, with September showing the first increase in demand for seven months. Could this be a sign that we might see some life injected back into the market, or are we just seeing the traditional seasonal patterns of property business play themselves out? Figures also showed that numbers of new listings continued to decline to almost historic lows in September, which may look negative at first glance. However, I’ve always been of the belief that the classic tenets of supply and demand are always necessary to jump start transactions. More buyers after less properties ultimately leads to better prices, which piques the interest of prospective sellers and increases the possibility of making them active which, in turn, means they become buyers themselves. We may not return to the days of sales being instructed on a Thursday and agreed well over asking price by Monday, but creating some competition between buyers and a sense of urgency in the market can only help start the cycle and provide some stimulus.
Despite this general positivity across the country, consensus seems to be that London’s property market will be the last UK sector to recover. It stands to reason that with more capital comes more uncertainty and this has been borne out by nationwide figures from Estate Agent Haart. They showed a stark difference in growth of month on month activity in September, with branches 100 miles from the capital showing a 75% increase, 45 miles away showing a 37% increase and branches inside the M25 producing just 1.1% of growth in the same period. This slump has been mirrored at the top end of the market, with the staggering 86% summer collapse of ‘super-prime’ £10 million+ sales in the capital and the fact that not a single new build property in this category was sold between June and August, despite them making up 23% of ‘super-prime’ sales in the same period last year.
It appears that we are seeing something of a break with tradition, seeing the rest of the country recover with buyers returning in a slow filter towards the capital. The question is, when will see a tangible impact on London’s transaction rates?
Let’s hope spring isn’t the only thing that blooms in early 2017!