How will Article 50 affect London’s property market?

Mark Lawrinson, Regional Sales Director of Portico London estate agents, has spoken out about the possible effects of Brexit on the London housing market, saying, “I don’t think the triggering of Article 50 will affect the property market directly from yesterdays announcement. In one sense it removes the uncertainty surrounding when Britain’s withdrawal process from the EU will start, but in another way it will create economic uncertainty until we know what deal we will strike and therefore what Brexit actually means for our country.

Mark continues, “Brexit will no doubt mean a turbulent two years for the London and UK market as we begin to hear what negotiations and proposed deals are being put forward for our exit of Europe and the single market. I think we will see a continued slowdown or lethargic London market when it comes to sales volumes, and as we reported toward the end of last year, transaction volumes across London are already more than half of what they were before the 2008 crash.

London has a significant part to play in businesses who trade and operate across Europe and the world, and a buoyant property market relies on the UK’s economic health. If Brexit negotiations go well this could cause further price growth as the economy grows and we see the nation’s confidence lifted, but equally, if a good deal isn’t reached then the international companies who operate here or look to relocate here might change their minds, reducing the number of residents who live in the capital and again further reducing the transaction levels, which could ultimately lead to price decreases.”

It’s therefore important that you make property decisions based on your personal situation and what you want to do, rather than gambling on how the market will play out.

Robert Nichols, Portico’s Managing Director, makes an important point, stating, “Right now we may experience some uncertainty, but as the negotiations progress, we will regain some much needed stability into the housing market, as people realise that the effects of Brexit are not catastrophic and go on with their lives. We’ll hopefully see transaction levels increase as a result, which are currently dangerously low and affecting price growth across the capital.

He continues, “Yesterday’s events are likely to have a much more profound effect on foreign investment however, with the weakening pound expected to fuel demand from overseas buyers and investors.”

Many are also speculating that yesterday’s events will mean that the Bank of England will be hesitant to increase their interest rates, in spite of the recent inflation increase. This will it will remain cheaper than ever to borrow and get on to the property ladder.

Many are also speculating that today’s events will mean that the Bank of England will be hesitant to increase their interest rates, in spite of the recent inflation increase. This will it will remain cheaper than ever to borrow and get on to the property ladder.

Article kindly provided by Portico, who are a residential estate agent with offices throughout London, specialising in flats and properties to rent and for sale. For landlords, they offer a range of unique packages which include monthly fees, a rental guarantee, complimentary maintenance between tenancies and assistance with tax return. For property sellers, they offer a dedicated property concierge and a complimentary interior styling service.

Please call 020 7428 5310 if Portico can assist you and your property portfolio.

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Top 10 places to buy-to-let in London, according to Portico Estate Agents

Over the past 5 years, all 32 London boroughs (and particularly those in central London) have experienced substantial property price growth, fuelled by a combination of record levels of overseas investment and historically low interest rates.

Whilst it is true that the recent reduction in the availability of interest-only mortgages and increases in stamp duty for the most expensive properties may mean that this trend will not be sustained indefinitely, it is certainly the case that, at the moment at least, central London property prices are at an all time high.

However, whilst property prices have increased substantially, rental prices have broadly continued to track earnings growth. As a result, rental prices have not increased at the same rate as property prices and yields have steadily declined in central areas for at least the past five years that we have been tracking them.

– See more at: https://www.portico.com/yields

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The UK decides to vote “Leave” but what now for UK Property

The dust has settled over the weekend and we have had time to adjust to the decision to “Leave” the European Union. Whether you voted to “Remain” or whether you voted to “Leave”, we are now facing a long period of uncertainty that will have a major impact on many of the personal decisions we make moving forward.

It would seem from the articles that we have read over the weekend that although we have made a decision as a country, it is actually how things will affect us personally that are concerning most people, which is ironic being that many people voted “Leave” for non-personal reasons.

From the viewpoint of the Landlord in the UK, we are facing a huge period of uncertainty as far as the housing markets are concerned and because no country has ever left the European Union, it is difficult for anyone to actually predict what will happen to property prices or the buy-to-let markets.

However, we do know that in the hours following the announcement that we would be leaving the European Union, shares in Housebuilder’s (Persimmon, Barrett and Berkeley) dropped by more than 20%, so does this mean that the housing market will fall dramatically?

Only time will tell, but Miles Shipside, Rightmove’s director and housing market analyst, stated: “Markets typically dislike uncertainty” and being as that is what the UK now faces it, it seems highly probable that house prices could lower as we pass through the two year period of uncertainty.

As for the Buy-to-Let sector, if property prices fall then investors can enjoy the benefits of purchasing property at lower prices, but given the recent changes in Stamp Duty, it may not be as simple as it would have been prior to the stamp duty increase. So yet again we face uncertainty as to how things will play out and we will just have to play the waiting game!

For more information on how the Property Markets will be affected click here 

Should Property Investors be exempt from Stamp Duty?

There has been so much in the news lately about the Stamp Duty changes, it is little wonder that there are so many opinions floating around on the subject. At the moment you are never too far away from a “Stamp Duty” article on the internet and today is no exception.

We awoke this morning to an article featured on Landlord Today which was talking about property investors asking for an exemption from the latest stamp duty charges.

According to the article “Professional investors should be exempt from the recently introduced 3% stamp duty surcharge according to the Better Renting for Britain campaign”

And…

“Some of the country’s biggest investors in the private rental sector have written an open letter to the housing minister Brandon Lewis requesting exemption from the extra stamp duty imposed on buy-to-let properties from 1 April 2016”

We have been mulling this over all day and have shared the article on various social media platforms that we manage and after seeing what people have to say, we felt that this article was worth sharing with our opinions.

Now we are merely “Accidental Landlords” and have found ourselves as Landlords through no choice of our own, however we have embraced the idea and actually quite enjoy it.. until recently when all the stamp duty changes came into effect.

We understand why it was brought in…. The Government wanted to put a halt to the buy to let investors who were “gobbling” up the market and preventing first time buyers getting on the ladder plus it will obviously make the Government a lot of money!!! HOWEVER in doing so it has prevented landlords like us from moving our family home (unless we pay the 3% Stamp Duty surcharge) because effectively our family home has become a second home, due to the first home being a buy to let (accidentally of course!)

So when we hear today in the news that Professional Investors wish to be exempt, you have to forgive us for having a strong distaste on the subject. It is because of professional investors “gobbling” up houses on the cheap that we are facing paying the extra stamp duty and yet they now wish to be exempt….

We don’t think that first time buyers stand no chance of getting on the property ladder. Landlords provide a service to people who do not wish to buy, but for those that do ultimately wish to own property, they should be given a chance. If Professional Investors are allowed an exemption, then all we are doing is admitting that the future generation will never be able to buy their own properties. Don’t give them the exemption and give young people a chance to buy if they wish too!

If we give exemption to Professional Investors then all we are doing is admitting that young people will never buy a house and that they will be condemned to a life of renting, which you may think is mad coming from a Landlord because after all we make money from renting out our property but in reality renting should be a stepping stone towards buying your own home and not just a big business for professional investors who are only looking at lining their own pockets and not to keen on the future generations being able to buy houses.

Click here to read the article on Landlord Today