Date Published 09 February 2016
It always takes the property market a few weeks to get going in the New Year, and almost as soon as it's shaken itself off and rubbed the sleep out of its eyes, we move seamlessly into February. This year the EU Referendum on BREXIT is already dominating the news and we expect that the market will slow down as we approach it, as it did with the General Election last year.
Interestingly, according to an online survey by eMoov, more than half of Londoners surveyed believed that leaving the EU would have a positive impact on the value of their property.
However, there are plenty of pessimists around too. A number of economists and analysts have reported that the FTSE 100 is down around 16% on the year and has entered a bear market, with other global markets tumbling amid a mass sell-off. OPEC's refusal to cut oil production, coupled with America's burgeoning shale industry has put steady downward pressure on the price of oil which is now below $30/barrel for Brent Crude.
Although the Middle East seems to have weathered low oil prices surprisingly well so far, wealthy investors in other countries with big oil sectors, such as Russia, are suffering from the glut in the oil supply which had made buying Sterling assets increasingly expensive.
In contrast, the London property market has a continuing long-term shortage of stock, which is unlikely to change in the foreseeable future. This will help keep demand high and will also go some way toward countering any negative pressure on prices, no matter what the external economic conditions are. Clearly the increased Stamp Duty burden from the Chancellor's Autumn Statement in December 2014 is still an issue for the market – despite The Office for National Statistics reporting a 9.8% increase in house prices across London in the year to November 2015.
According to the House Price Sentiment Index (HPSI) by research firm Markit in January, British homeowners expect property values to rise in the coming year, despite the problems in global economic markets and George Osborne's recent warning of 'a dangerous cocktail of risks' to domestic and world economies. In the past the HPSI has been a good indication of upcoming property market conditions and the strong survey results in January are encouraging.
While we always look at all economic and political factors affecting the property market, our own activity tells us there is still a lot of quality business going on, if you know where to find it.
We have received strong offers on all of the last three houses we put on the market for sale – one at the asking price
We are not seeing any slow-down in new buyer registrations
Some sectors of the rentals market are seeing strong demand – we have already seen a noticeable increase in executed tenancies so far this year against the same period last year
There is an increase in activity among investment purchasers looking to buy before the Stamp Duty increase on 1st April
As February unfolds, we always see a general uptick in activity on both sides of the fence – buyers and sellers alike, which is good news for both. More sellers offer greater choice and more buyers means a healthy injection of excitement in the market with more opportunities to sell their own home and move up or down the ladder as their needs and family circumstances dictate.
If you're thinking about selling or renting your property, and would like to talk to the acknowledged Prime Central London property experts, give us a call or drop into the office. We guarantee you'll know a lot more about the market when you leave than when you arrived.
