Will this summer be a surprisingly good time to buy property?

 
Will this summer be a surprisingly good time to buy property? [Photo: Courtney Keating via iStock]

If there's one word that has pretty much summed up the British property market in the weeks since the electorate voted with a slight majority to leave the European Union (EU), it's uncertainty. 

No one quite knows how the property market is going to be affected on the whole by the Brexit choice, while there's also general uncertainty around employment, personal finances and the economy. This has led many to develop a wait and see attitude when it comes to property purchases, but could now actually be the best time to purchase a home in the UK?

According to Business Insider, this may well be the case, because although there is no real certainty about how the property market will react to Brexit in coming months, as long as people are not looking to get returns on a purchase for some time, it could be a great time to get on the ladder, and here's why.

For one thing, house prices were already starting to slow in the months before the Brexit decision was made. Halifax house price index data for June shows that the quarterly growth in April to June period was slower than that in January to March, which is very surprising given that quarter two is normally when the sector gears up for summer; one of the busiest times of the year. 

Given that this happened before the Brexit decision was even made, it could be an indicator that July and beyond will be even slower in terms of house price rises. This is normally the time of year when buyers will face some of the fastest rising prices thanks to the competition that exists between buyers as the number of people looking to get onto the ladder increases markedly. 

However, given how soon after the referendum summer falls, it's highly likely that 2016 will be very muted, even in the warmer months. It means that for those not looking to buy property for quick returns - buy-to-let for example - this can be one of the best times to get onto the ladder. 

The fact is that even if prices are not performing at their best at the moment, they are likely to rebound in the future once more, so those who invest now in somewhere to live rather than somewhere to rent out are always going to see capital gains, as long as they are prepared to wait. Seeing the value stall for a few years can be a good trade off to get a very affordable price to get onto the ladder. 

Adding to the perfect storm of cheaper property prices is the fact that new buyers and second steppers - traditionally those who struggle most with housing affordability - are unlikely to face the usual competition they do from landlords this summer. With nearly five million tenants nationwide and a growing demand all the time, landlords have often been blamed for pricing younger people in particular out of the market in recent times. 

However, in 2016, most may have already done most of their portfolio activity for the year. After April 1st, landlords were hit with a three per cent additional surcharge on top of their Stamp Duty payments when investing in rental homes, which greatly increased the cost of investment. For many, this meant pushing any investment activity to the start of the year and rushing through completions before the end of March. 

While there will still be some investing in rental homes over the summer months - rising tenant demand and solid performance will dictate this - buyers will be experiencing less competition from buy-to-let investors than they have during summer in previous years, which will mean the likelihood of them being priced out by upward pressures on final sale values caused by competition could be lower than usual. 

So even though Brexit has been painted as a negative for the property market in general, savvy buyers may find that now is the opportunity to buy that they might not have had in any other year, and it may be the chance to find their footing on the property ladder at long last.