The uncertainty of Brexit is still being impacted in London and the South of England. After several years and months of prices dropping there is evidence that the market is showing signs of levelling out as prices recorded their smallest fall since June 2014. It is predicted that as we approach ‘D-Day’ at the end of October, there will be a shortage of new instructions in some areas and market sectors, that create a higher demand for properties.
Looking ahead – 2019/20
There are a number of key reasons as to why there has been such a slowdown in the overall number of transactions in the normal buoyant areas of Southern England including London.
Government policies especially the indecision of leaving Brexit (with or without a deal), the cost of borrowing money, the reluctance of lenders to lend given the indecision of the economic conditions, increased supply of properties and global economic uncertainty have all contributed.
You could also consider having a new Prime Minister and ultimately whether the UK will end up in a General Election will help or hinder the market going forward!
So, it is hoped and predicted that there will not be further price falls and that growth will remain flat or experience small increases in value over the medium term.
Major residential prices are strengthened by a fundamental gap in supply and demand. It is also projected that high net worth individuals will continue to want to hold one or more world city prime residential properties as part of their portfolio, both as a store of wealth and as a base for work and leisure.
It is interesting to note that European cities in the short to medium term are benefitting from the confused position that the UK are in over Brexit. The residential property markets continue to outperform as they benefit from Brexit and comparatively lower property prices.
Looking ahead to the longer term, wealth generation will be critical to the growth of each city’s prime residential market, along with political and economic stability and favourable demographics.