The clocks have once again sprung forward which traditionally does give the London property market a shot in the arm. The longer evenings, the spring flowers and dare I say it warmer climate historically does put people in a better mood and the impetus to move is enhanced from the winter season blues.
Will 2017 follow suit of previous years or will the calamity caused by the stamp duty reforms, interest rate relief for landlords and the ongoing Brexit uncertainty undermine this tradition? Only time will tell but we believe that there will be a higher volume of transactions taking place.
In 2016 post the 3% additional stamp duty levy on second homes the market without doubt paused for breath as investors and owner occupiers alike began to sit on hands to see what the impact of this huge change would be. The reduced number of motivated buyers did translate to developers and well advised owners dropping prices in an effort to sell the properties and the latter months of 2016 were very busy.
Property in central London remains very desirable and there are a multitude of buyers but unlike in former years it has to be at the right price. Calling the top of the market is something that cannot be done with accuracy at a London wide scale, it’s too vast, too diverse, has too many micro markets and there are multiple variables that can exacerbate a change in a given postcode.
However in much of central London over the past nine months the market has dropped in almost every sector as the reality of the stamp duty changes have come home to roost and the reduced numbers of investment landlords in the market. After all the costs of entry for investment landlords are greater, interest rate relief is beginning this year, rents are at best static but in reality falling and even the most optimistic agent would struggle to justify any capital gains in the near future with the ongoing uncertainty.
You could argue that now is the worst time to sell in recent memory but you have to put things into perspective. After all Charlie Chaplin aside who really sells at the top of the market? Unlike the Wall Street crash of 1929 we are not seeing a crash just a relatively small price correction and a levelling out of prices. While some commentators on property could not see this coming it was all very logical. Prices in some areas were rising at an astonishing rate over 20% per year at some point it had to stop and when it stopped rising the natural balance had to be found.
So is now a good time to sell? Well I would suggests it all depends on your personal situation but with prices in Central London looking fairly static for the foreseeable future it certainly makes sense to get your property valued and consider your options.
We have seen a steep increase in valuations from owner occupiers who have almost been trapped in their property by its rising value. In many cases they have wanted to move for a number of years but the rising values have meant that they have felt compelled to stay put as they in many cases are making more money living in the property than they are going to work! Now really is the time for these type of vendors to get the property to market and make the move.
Investment landlords both big and small should also consider their position. The interest rate relief for many will be painful and it may well make sense to consolidate their position to mitigate these costs. If any of you need any detailed advice on how the interest rate relief will affect your personal situation please do feel free to get in contact are we can run through it in detail.
I hope you all have a very enjoyable Easter Break and the weather is kind to us all.