In Q4 of 2016 we saw many domestic buyers gradually adopt a post-Brexit “life must go on” attitude towards their property plans. We have seen that sentiment continue into the new year and we expect it to remain fairly constant throughout 2017.
Overseas buyers are continuing to be active as well, and we are currently advising clients from the USA, China, Australia and Europe.
Sellers are generally still being practical with the prices they are willing to accept. Most are either cashing in previous capital gains or they are selling in order to facilitate their next move.
We believe that the main price falls have already happened and that prices will remain fairly stable over the next 12-24 months. This forecast is in line with many of the leading residential research analysts.
We expect to see a big push by industry leaders, ahead of the Budget this October, campaigning for changes to the new Stamp Duty Land Tax (SDLT) and the additional SDLT rate introduced in April 2016. However we believe the subject is too politically sensitive for any changes to be expected.
The revised SDLT calculation penalises only the top 2% of all UK property transactions. In addition, whilst SDLT revenue on transactions below £1m is down, statistics show that overall, 12% more was collected in the first 8 months of last year, compared to 2015/16 – despite a 10% fall in transactions. Any changes to these policies will therefore be extremely difficult to justify in our opinion.
There has been some speculation that the triggering of Article 50 may reduce prices. We don’t believe this will be the case. It is a widely expected event and we don’t foresee any major pricing reaction to result from it.
Based on the above, we are advising anyone wanting to buy for the short term (less than three years) to hold off and consider renting as an alternative. However, for those buying with a horizon of more than three years we believe that now is a good time to enter the market, as long as the right property can be sourced and secured for a competitive price.