Welcome to 2016. At the moment it is all looking like a bit of a blank canvas and we are looking carefully for signs as to how it will all pan out here in Central London.
The players who will be participating in this year’s market will be doing likewise and so here is my view at this early stage of the things to look out for.
The upcoming tax changes in April will encourage overseas, investment or second homebuyers to get in under the wire if they can. As that date nears buyers will factor in the additional costs and bid cautiously to account for this. To put it in perspective, a £1m investment flat will cost an extra £30k from April 1st.
Commodity prices, currency levels, Chinese economic performance and general unpleasantness abroad will all play a part in determining overseas interest in London Properties.
Uncertainty abroad can sometimes mitigate the above as London looks like a safer home for your money and the issues becomes one of wealth preservation rather than a guaranteed capital or investment return.
I believe that we are in a corrective and consolidating phase of the market after the long term rises we have seen since 2009 and this phase would have occurred regardless of the peripheral influences we are seeing at the moment.
The Governor of the Bank Of England in his forward governance advice has strongly indicated that the long awaited rises in interest rates will begin this year in a very gradual and managed manner. I am not convinced. We have been here before and it does not take much to further postpone the rises as we have both inflationary as well as deflationary pressures in our economy at the moment. The discussions and implications about Brexit are also starting to come onto the radar.
As is often said, you can lay all the economists in the country end to end and they still would not reach a conclusion but my predictions are that the Central London market will track sideways with new-build prices suffering the most in the first half of the year. Supply and demand in the second hand market will be about equal and the main criteria for a successful sale will be your initial price-point allowing the property to generate its own interest.
It would not surprise me if prices generally were at, or slightly below current levels into the later part of this year.
Should you wish to discuss the property market or ask us any advice, then please do call the Clerkenwell & City office on 0207 405 1288 or email us at firstname.lastname@example.org