UK property market ‘remains peachy’

Everything's moving nicely - except London's top-end

The Brexit vote doesn’t seem to have had a significant impact on the national property market, says Jackson-Stops & Staff. In fact, the firm has declared the market to be “peachy” after tracking 500,000 Zoopla listings to assess the state of play three months on.

The number of property listings has actually increased by 1% since the referendum, although the proportion sold (subject to contract) has dipped by (a fairly marginal) 2.5%. Under Agreed Offer properties now represent 36.1% of all properties on the market, down from 39.4% in mid-June before Brexit.

The median asking prices of all UK properties for sale is down by 2% (from £297,508 in mid-June to £291,547 today), while London asking prices have seen a more telling 3% drop.

London’s market is clearly under-performing, but – as most analysts and commentators have already pointed out – it’s higher stamp duty rates that are behind most of the deceleration in the capital. That, and a simple price correction after a few years of frankly unsustainable price inflation. It might not be ideal for agents and investors, but a tempering of the top-end is pretty much what George Osborne’s tax and policy changes were designed to do.

It’s not a crash, but the SDLT effect becomes obvious when tracking the £2m+ market (most affected by changes): just 7% of properties in London priced above £2m are under agreed offer, compared to 28% for all London properties.

The average median asking price for all properties on the market in the capital is now £537,639, down from £554,267 in mid-June. Properties priced below £1m are still seeing high levels of interest, however with a smaller number of homes coming to market, competition among buyers who need to move is increasing, especially in locations outsize of zones one and two, where the majority of buyers tend to be families or young professionals.

Nick Leeming, Chairman at Jackson-Stops & Staff: “Three months after the UK’s historic vote to leave the EU, the property market remains alive and active. There are more properties on the market today than on the day of the Brexit vote, and there has only been a marginal decline in the number of properties under offer. House prices have also declined only moderately. The normal events – families growing, the desire to downsize, a new job, a change of lifestyle – the fundamental drivers for people buying and selling property, have remained unchanged.

“London has always been an island when it comes to the housing market and is governed by a range of forces that are not as strongly at play across the rest of the UK, such as significant international investment and High Net Worth buyers. The fact that there is a freeze around the higher value properties in the Capital is due to a number of factors, not just confidence levels following the Brexit vote, but also the impact of Stamp Duty at the very highest levels. Stamp duty amounts to £213,750 for a £2 million priced property (assuming it’s a second home) which doesn’t offer a great motive to buyers! Our outer London branches in locations such as Wimbledon, Richmond, Teddington and Weybridge are continuing to see high levels of demand, especially among families and young professionals, showing that this market remains active. This reduction in confidence therefore appears to be confined to the highest echelons with properties priced in the lower bands seeing substantially more interest. We anticipate that the market will correct itself as we head into the final quarter of this year.”