Now that the referendum result has been announced, we thought it useful to portray our predictions as to how the market may perform, in light of the result.
Since the outset of the campaign to determine the UK’s future involvement with Europe, which officially began on the 20th February 2016, the repercussions of the uncertainty surrounding the eventual outcome have certainly impacted the prime central London property market.
We are now pleased that this process has been completed and we thought it useful to portray our predictions as to how the market may perform, in light of the result.
It is important that Sellers continue to understand that Buyers will carry on seeking value to compensate them for high purchasing costs. Many will continue to demand detailed comparable evidence, to substantiate that they are making a prudent acquisition. We expect to see a steady rise in flats and houses coming available to purchase, thus increasing choice and providing Applicants with a wider platform to negotiate terms.
With regard to the Lettings market, we have been observing a more diverse Tenant, typically happy to consider multiple locations, with less focus on the importance of living in a prime postcode and increasingly wanting value for money. With a vote to leave, we anticipate many of our existing Tenancies to opt to renew on a rolling basis, thus allowing flexibility in the event they wish to depart London at short notice. In addition, many of our Corporate Applicants have been wanting to determine the outcome of the referendum to factor job security. We had seen an increase in registrations leading up to the result and had hoped to begin servicing these Parties over the coming weeks. However, with many of our Tenants being originally based overseas and working for global companies, we expect an initial exodus from London and corresponding job losses. In an environment where there are already high levels of stock availability, from some Sellers becoming reluctant Landlords due to a slow sales market; Landlords must now consider presentation, accurate asking prices and flexibility on occupation terms, to achieve a rental. We suspect that conditions will become more difficult over the course of 2016, with an increase in supply and a decrease in Tenants, promoting excellent conditions for the renter but, a difficult atmosphere for our Landlords.
In summary for the sales market, Buyers should take delight in this outcome and utilise the fantastic opportunity the coming months should offer. Vendors are being more realistic and in many cases happy to contribute towards onerous SDLT, via lower asking prices and corresponding flexibility on the eventual sale price. This combined with a longer term stable economic outlook once the renegotiations with the EU and world markets are complete, makes the prospect of ownership of property in the golden postcodes of London certainly more attractive.
As a final note, we believe that some comfort should be taken in David Cameron’s decision to resign as Prime Minister in due course, thus allowing an opportunity for a cross party team representing the interests of the entire country, to negotiate the best possible terms relating to on-going trade with the EU..
Assoc RICS / MNAEA
Winkworth Knightsbridge, Chelsea & Belgravia