Given the fact that the deadline for the UK to leave EU has been extended until the end of October, it’s only natural that the latest statistics show that buyers have become more active in London’s property market.
According to a study conducted by the RICS – Royal Institution of Chartered Surveyors – even though the prices in South East have continued to tumble, most buyers were still feeling drawn back into the property market in May.
The Market Is Still Cautious
A survey of the same aforementioned institution also showed that the market outlook is still cautious. However, it is expected that the activity and average prices of London’s property market will improve in the following twelve months.
Roughly ten percent of the people that contributed to the said survey stated that they did, in fact, notice a fall in property values in the month of May. On the other hand, around twenty-two percent of surveyors stated that this fall began earlier, in April.
If we are to look at other regions, such as the Midlands, the North, and Wales, we’ll notice the fact that values keep on rising at significant levels. Naturally, the South East is still characterised by downward pressure.
Reportedly, Brexit does not impact the aforementioned areas, especially the North, as people here usually buy properties to live in and not to use as an investment.
London Has a Different Story
According to Ames Belgravia’s Christopher Ames, London sees a different story mainly due to the fact that people here know that the UK has powerful ties with the USA, as well as with Europe – hence the increase of the dollar-backed purchases.
Overall, it is believed that the property market may be steadying, seeing little to no influence on behalf of Brexit. Therefore, the buyers in the UK are no longer waiting for the country’s withdrawal from the EU – if the need is there, they will buy.
Looking at recent data, we notice that, despite Brexit’s approaching, the tenant demand has actually increased in May and that for the fifth month in a row. Still, keep in mind that this also means that the rents are continuously rising, not only in London but throughout the UK as well.
The Capital Starts to Bounce Back
Even though, in the first three months of 2019, London’s property prices dropped 3.8% in value – which is the biggest drop since 2009 – reports suggest that the entire market will become steady in the following months. That’s mainly because London starts to bounce back and get into the game.
Overall, we can only wait and see what will happen. Given the fact that the landlord’s net return has deteriorated, it is most likely that what has been mentioned above will come true and London’s property market will not see such a big influence at the hands of Brexit.
The Bottom Line
Hanan Shapira, the managing director of Property Finance Partners, said that one of the most vital things you should take into consideration is the understanding of tax obligations so that pitfall would be avoided. So, it is now clear that you have to keep an eye out on other things as well.
The UK’s property market is described as buoyant, but this doesn’t mean that you should take this for granted and ignore the things that are currently happening within the country.