On 11 December, House of Commons will vote on Theresa May’s Brexit deal. After a year of price adjustments throughout prime central London and beyond, Tim Fairweather, Director at London estate agents Sandfords, comments on what the outcome could mean for the property market in 2019.
“We are entering into a crucial time for the country as a whole, so naturally this uncertainty has an impact on homeowner sentiment. It is no secret that property prices across the capital have been drifting down for the last couple of years. However, this does not mean property sales are at a standstill or that price drops reported by house price indices are applicable to all. We have had properties achieving the same as they would have in 2014, and others which have come down by as much as 15-20%. This year, three crucial factors have determined successful sales; pricing, product and agent advice.
“Buyers have more choice than in previous years, therefore, the quality and finish of properties has played an important role. Those with a desire to move right away have leant more heavily on advice from their agent regarding market conditions and then priced accordingly, with success. Others, particularly overseas investors, have chosen to wait before making big financial commitments, as is typical when there is any kind of political uncertainly.”
Brexit and 2019
“The outcome of Brexit negotiations is pivotal because the key to the property market is confidence, and this will not come until we have clarity. If the government does not agree a deal, then the London market is likely to continue to weaken in the short-term.
“The recent house price falls across London have, in part, been consequential of the uncertainty surrounding Brexit, but can mostly be attributed to the deluge of tax changes. However, the market has now adjusted to these and prices have started to stabalise. So, if a deal is agreed, it is possible the market could recover quite quickly and start to see growth once again. However, this will be very much dependent on the economic consequences of whatever is agreed.
“It is also important to remember that the London market is one of the most robust, which is reassuring for homeowners. In the long-term, the fundamental reasons why people buy in London are unlikely to change post-Brexit. It is the financial services capital of the world, has a much sought-after education system and the continued imbalance of supply and demand, particularly in London, means that historically property has always been a sound long-term investment.”