UK property market remains peachy three months after the Brexit vote
Analysis of the UK housing market by national estate agent, Jackson-Stops & Staff, reveals that the UK housing market remains alive and active.
- Number of properties on the market in the UK has increased since the vote but the proportion sold (subject to contract) has decreased – but only by 2.5%
- Asking prices of all UK properties for sale down by only 2% (from £297,508 in mid-June to £291,547 today)
- In London asking prices are only down 3% since mid-June
- Just 7% of properties in London priced above £2 million are under agreed offer
The analysis, which is based on a daily sample of over 500,000 actual properties for sale in the UK over the last 3 months, does not suggest a housing market crash has occurred post Brexit. However in London stamp duty is having a significant effect on properties priced upwards of £2 million.
UK property market remains active with more properties for sale
The number of properties on the market in the UK has risen by 1.0% over the last 3 months (mid-June to mid-September).
The number of properties under agreed offer (including sold subject to contract) has fallen by 2.5%. Of the approximate 320,000 UK properties with an agreed offer, this percentage reduction represents a total of 8,000 fewer properties. Under Agreed Offer properties now represent 36.1% of all properties on the market, down from 39.4% in mid-June before Brexit.
The above weaker transactional data has resulted in the national average asking price of properties on the market falling by 2.0% (from £297,508 in mid-June, to £291,547 in mid-September).
Nick Leeming, Chairman at Jackson-Stops & Staff, comments: “Three months after the UK’s historic vote to leave the EU, the property market remains alive and active. There are more properties on the market today than on the day of the Brexit vote, and there has only been a marginal decline in the number of properties under offer.”
London property has not crashed, however the upper end of the market is seeing a significant decline in activity
While the general UK market has weakened only slightly since the Brexit vote, London has seen asking prices 3% down from mid-June. In London, the average median asking price for all properties on the market is now £537,639, down from £554,267 in mid-June. Properties priced below £1 million are still seeing high levels of interest, however with a smaller number of homes coming to market, competition among buyers who need to move is increasing, especially in locations outsize of zones one and two, where the majority of buyers tend to be families or young professionals.
Of all of the properties on the market in London with asking prices above £2 million, only 7% are under agreed offer. This compares to 28% for all London properties.
London’s top end has suffered more than average with the proportion of agreed offers being over 5 times less than rest of the UK. The market above £2 million has log jammed, but not as a result of the Brexit. Despite the fall in the Pound being attractive for foreign investors, the very high stamp duty for second home investors has understandably dampened agreed sales – a trend that was occurring before the Brexit vote.
Nick Leeming continues: “London has always been an island when it comes to the housing market and is governed by a range of forces that are not as strongly at play across the rest of the UK, such as significant international investment and High Net Worth buyers. The fact that there is a freeze around the higher value properties in the Capital is due to a number of factors, not just confidence levels following the Brexit vote, but also the impact of Stamp Duty at the very highest levels. Stamp Duty amounts to £213,750 for a £2 million priced property (assuming it’s a second home) which doesn’t offer a great motive to buyers!
“[The] reduction in confidence…appears to be confined to the highest echelons with properties priced in the lower bands seeing substantially more interest. We anticipate that the market will correct itself as we head into the final quarter of this year.”