News General Fall in UK Property Prices won’t affect entry level properties in London – but top end continues to be hardest hit.
Published by AgentPro on 19th December, 2017
The professional body for Estate Agents, NAEA, has predicted that house prices are likely to fall next year, and Rightmove say they expect prices to fall by as much as 2%.
However, in London, we don’t expect to see the same trends that we see across the rest of the UK.
The sale price of entry level properties is actually likely to rise in London, whereas unfortunately we expect to see a larger fall in prices at the high end, with £1m plus properties even falling as much as 5%.
High property prices in the Capital for relatively modest homes means that huge stamp duty fees are preventing second and third time buyers from moving on. The trend in 2017 has been for first-time-buyers to stay in their properties for longer, making extensions and improvements rather than moving home, as property taxes are increasingly prohibitive.
Brexit adding to the pressures on the London market.
The London property market is also being hit hard by the uncertainty surrounding Brexit, and none more so than North West London.
Unsure whether they will be relocating to Europe or being made redundant, many of these professionals are staying put until there is more stability. However, some of them have already relocated and the impact is going beyond the financial hub, as service businesses are also uncertain of what is to come.
Frankly, with nobody knowing exactly what to expect, few people at the higher end of the market want to risk moving home – and the higher end properties that attract top financial executives are feeling the pressure more than most.
Online Estate Agents
Many of my industry colleagues are concerned about the growth of online start-ups in the property market with little knowedge or experience, and more of them are likely to spring up in 2018.
While many estate agents have raised concerns, it is not an issue that Benham & Reeves have had to be overly concerned with. Our clients tend to be at the higher end of the market and our sellers are therefore more concerned that their property is professionally marketed by an experienced estate agent who will progress a sale through to completion.
At the lower end of the market, however, my advice is caveat emptor – buyer (or seller!) beware. I join my colleagues in calling for better regulation for the online-only startups.
Estate Agents will continue to challenge ‘unfair’property taxes
Unfortunately, the Chancellor lost a valuable opportunity in September to help the middle and higher ends of the property market. There was no relief from the high property taxes that stifled the market in2017, and we can no longer look for buy to let landlords to help keep the market buoyant. 2017 saw even higher taxes and increased regulation imposed on buy-to-let purchasers, with many of them now threatening to sell their properties and invest elsewhere.
My hope is that in 2018 will see change. Long term, I would question the Government’s current strategy of increasing tax at the higher end of the market and increasing taxes for buy-to-let purchasers when the UK is in the midst of a housing crisis. Vital London professionals,like doctors and nurses are having to leave the area and commute if they wishto raise families – this cannot continue.
Like many in my profession, I’m going to continue to press for urgent property tax reform in 2018. It needs serious action, not a sticking plaster, in order to get buyers and sellers in London (and elsewhere) moving house again. I only hope that in 2018, the cries of property professionals like myself do not remain unheard.