The uncertainty of the last 12 months is reflected in the property market – especially as the timing coincides with regulatory and taxation changes for landlords.
The property data company REalyse’s CEO, Gavriel Merkado, highlights three issues which directly impact upon the housing market:
“Perhaps the most influential issue when it comes to asking and sold prices is supply and demand, says Merkado. “The UK is an incredibly attractive location to live, not just for UK nationals but for many people from around the world, for a variety of different reasons. Proposed changes in immigration law, and indeed an expected end to free movement which might appear as a result of Brexit, could potentially reduce competition for housing and thereby prices. As yet however, no government has been able to effectively deliver on campaigns to minimise net immigration, and even the prospect of leaving the EU does not seem to have deterred people from emigrating.”
2. Credit Availability
“The majority of purchases in the UK are not bought outright, but using credit. Interest rates are at historic lows and at the same time the amount of lending has also increased,” explains Merkado. “With more people competing for fewer properties, more available credit and low interest rates, one of the few factors negatively impacting the property market is income. Particularly in London and the South East where prices now often equate to over five times annual incomes, affordability is a real problem.”
3. Government Regulation
The current government seems to favour the ‘professionalisation’ of the rental sector, and many everyday landlords are finding themselves squeezed out, in place of larger institutional managers and developers. Changes in stamp duty and taxation have already had a significant impact to the viability of a private landlord. With over a third of people in the UK renting, continued disincentives for their landlords to own the property may cause a large number of disposals and ultimately reduce prices. Which is good for buyers, but bad for owners.
In summary, a high level of political uncertainty remains. However – the difference between sold and asking prices is narrowing. This, together with credit availability, is keeping the market moving.
“The demand for housing in north London is growing,” says Jason Dyer of JTM Homes. “The location is cheaper than central London yet easily commutable. Whilst there is uncertainty at the moment, there are also some fantastic opportunities available.”
If you are thinking of moving or letting in north London, contact the experts at JTM Homes.