Brexit means Brexit, but what does it mean for London’s property market?
The spectre of June’s Brexit vote and its long term implications on our property market have consistently pervaded the news cycle for very nearly the last three months. Will overseas investors pounce and dominate the market? Will prices go through the floor or stay solid? How will the economic implications affect mortgage lending? These questions and many more have stared back at us from the headlines all summer, begging the question of whether as Autumn looms we have any indications or answers yet.
As we make up a part of the conveyancing process, the immediate concerns the vote result gave us here at X-Press was whether buyers would pull out of deals agreed before 23 June and whether we would see an instant deadening of the market due to the obvious uncertainties Brexit caused. Despite a few horror stories from clients, one solicitor had 3 substantial cases fall through on the afternoon of 24 June, we didn’t experience a wide ranging collapse of transactions across the board as many had feared. Consensus seemed to be that although there was widespread hesitation and legitimate concern from a majority of buyers, panic and instantaneous reactions were confined to a small minority. Nationally, a report produced by analysts at UBS appeared to bear this out. They observed that although the number of properties under offer did indeed dip, the change was not stark and the low end of the market remained relatively unchanged.
However, London property does not occupy the low end of the market and therefore the changes that Brexit has caused have been more evident here in the capital than anywhere else. The Guardian reported that London’s million pound homes were struggling to sell in the wake of Brexit, quoting the statistic that there were 4.5 times more homes valued at £1.5 million and over on the market than sold at this time last year, whereas that number has now risen to 7.5. With 307,433 of the capital’s properties in 2015 listed at £1 million plus this trend is incredibly important and it will be fascinating to see whether buyers come back to the high end of the market as the year progresses and fears either assuage or harden. The high end property market has been so fraught with disruptions this year from April’s Stamp Duty switches to June’s shocking referendum result, it will be interesting to see if we can sustain a period of relative normality and gather some meaningful samples to answer the plethora of pressing questions facing the market.