We offer up an overview of what's happened in property this year, focusing on our local market.
The word we've heard spoken more than any other this year must be 'Brexit'. It's never been out of the headlines, it's even worked its way into the Collins Dictionary. It's also had an impact on the property market in 2016.
So what's happened? Well, Brexit has led to a drop in the value of the pound (October saw the pound fall to a 31-year low against the dollar). As well as a weakening currency, record-low interest rates have made the market more enticing to overseas buyers and investors in search of a good investment.
Despite the ripples of uncertainty caused by Brexit, global uncertainty in other regions has helped encourage overseas investors to continue to regard the UK as a good place in which to invest, while the London market is still viewed as a safe haven for property investment.
The sales market had already slowed before the EU referendum. The subsequent uncertainty destabilised the market, but so far, the impact has been contained. This uncertainty has led some buyers and vendors to put off making decisions. Buyer demand fell after the referendum, but in recent months has started to rise again. With fewer people committing to buying, the rental market in our area remains buoyant.
The main test for the market will come in 2017, when Article 50 is triggered and the negotiations begin.
Brexit aside, many property insiders will actually say that tax changes and stamp duty increases have impacted upon the market more than Brexit. These stamp duty increases have especially impacted on the prime London property market, including around Mayfair, Marble Arch and Knightsbridge.
In fact, the main event which impacted on our market this year was the countdown to the higher stamp duty threshold, which led to a record number of sales enquiries at the start of the year, followed by a last minute rush for completions at the end of March, just before the extra 3% increase came into affect on April 1st. April saw a drop in buy-to-let activity, but the market seems to have lifted in the last few months, with investors tempted by the prospect of good returns.
Higher taxation for buyers at the top end of the market has led to a slight slowdown, as buyers continue to look for good value. Areas such as Paddington, for example, are seen to offer good value for money, especially due to the Crossrail project, which will further improve transport links.
Brexit might not have been what the property market needed so soon after the global financial crisis, but it has shown resilience this year. Looking ahead to next year, we remain confident that the prime central London market will continue to thrive.
Are you looking to buy or let property around the Knightsbridge or Marble Arch areas? Contact us today