When Gordon & Co conducted its own online poll back in March this year, we found that 38% of our clients weren’t planning to sell their homes until Brexit is done.
This suggests that over a third of London homeowners are holding their breath, waiting for the moment when the clock strikes twelve on 31st December 2020 (currently the default date for Britain’s departure from the EU) before putting their property on the market. Are they right to hold on, or are they missing an opportunity to move while market conditions are strong?
How has Brexit affected house prices?
Confidence is everything when it comes to selling property in London, but recent figures from Nationwide confirm that the capital’s property market has fallen for the ninth quarter in succession, with the average cost of a home falling by 1.7% in the three months to September.
Like most London estate agents, we’ve been hearing from concerned homeowners who ask “How much is my property worth in a market affected by Brexit?” Ironically, despite a slew of positive indicators, including interest rates at an all-time low, a shortage of housing stock and a predicted 20.5% rise in prime central London property over the next five years, confidence remains shaky. However, some clients, tired of “dither and delay” (to quote Boris Johnson) are now testing the waters by requesting a free property valuation.
Where are we now?
With the UK split firmly down the middle on the question of Leave or Remain, the likelihood of a hung parliament following the 12th December general election is strong. But if voting results in a parliamentary majority (suggesting that the matter of Brexit will finally be concluded - one way or the other - in 2020), it could trigger a bounce in market activity.
However, a government majority won’t dispel all uncertainty. If Labour wins, Brexit will be subject to a second referendum, while a Conservative victory would mean the prospect of a ‘no deal’ scenario coming back into play by the end of next year. But the 7% ‘no deal’ price dip predicted by accountancy firm KPMG sounds less significant when it is compared to some historical, short-term fluctuations in the UK property market.
According to the RICS, following the Stamp Duty increase of 1st April 2016, the number of UK home sales dropped by a staggering 45.2% in the same month (with a knock on effect on prices), before recovering later in the year.
Beat the doomsters
As election fever grips the country and negative headlines proliferate, it may seem more advisable to hunker down and wait than to take action. But overseas buyers, encouraged by a weak pound, continue to invest in London properties at a healthy rate and the Bank of England has recently hinted at an interest cut, making mortgages an even more attractive proposition for potential buyers.
If you’re still undecided about whether or not to sell your home, an accurate property valuation can be a helpful first step. If you’d like a valuation, or have any other questions about selling your home, our sales team at Gordon & Co would be happy to advise you.