The UK property market has been something of an obsession following the EU referendum. House prices declined continuously for months following and record numbers of buyers pulled out of transactions in a panic.
Although the annual house price growth rate dropped from 9.7 percent to 8.3 percent in July, the market experienced a slight increase of 0.6 percent in August and it is slowly recovering from the initial uncertainty. London experienced increases of 12.3 percent on house prices, and although transaction volume is much lower, the market remains robust.
The EU referendum attracted a lot of overseas investors, due to the fall in the value of the pound. US buyers who were already renting in the UK have been taking advantage of the 10 percent discount currently available to them from the Sterling dip and prices are being negotiated on a larger scale, with the current average saving being £25,000, as opposed to the £4,000 reported in January.
The volume of transactions has been down 32 percent from last year, in prime central London, but only 19 percent in the £10 million and over market. The smaller decline in this market is due to the vast amount of choice available in this price range, with a 25 percent increase of listings from August, taking the number of properties from 100 to 125.
A new report by Wetherell reveals a residential property market worth £750 million, offering 161 to potential buyers; this is a 25 percent increase from last year and 67 percent from 2014. Asking prices have reduced in the area, on 45 percent of flats and 36 percent of houses, but only by 3 percent. The last three months have seen asking prices decrease from 92 to 89 percent from 2015.
The Property Rental Market, Post-Brexit
The UK’s property sales market is quickly being overtaken by the rental market, following the EU referendum, as property prices and demand increase and the supply of available homes falls. While consumers struggle to find affordable property, the number of people renting is rising and is expected to be higher than the number of buyers for the first time in almost 80 years.
Buyers are much more wary following the referendum, and uncertainty has boosted the rental market with record activity reported in September. The supply of rental properties increased last month, with potential tenants viewing properties an average of five times before signing a contract. Rental prices are only just beginning to rise with London still home to the highest rental rates, but the current market has reduced the number of tenants negotiating their rental cost lower, with only 24 percent achieving a lower cost and the average tenancy agreement has settled at 18 months. We have already seen rental price increase by 12 percent in London.
Rental prices are relatively high across the nation, with renters finding it difficult to save enough to buy their way the property ladder and take advantage of the extremely low-interest rates. Rates may be attractive, but the down payments and security lenders are making it more difficult for new buyers.
The rental market in prime central London remains prominent with the average rental cost increasing by 8.7 percent in August, with exclusive neighbourhoods reaching almost £4,000 a month in rental prices. The average rent across the UK is now £887 per month, according to Your Move. The rest of London has an average monthly rental price of £1,391.
The number of listings on the buy-to-let market since before the EU referendum has not changed and 80 percent of investors have no intention of changing their plans on property investments, according to Simple Landlords Insurance, despite the proposed tax relief cut on buy-to-let mortgage payments. While some landlords are cautious before investing further, many are seeing new opportunities in the rental market.