Ahead of the release of the May set of RICS House Prices data on Thursday 9th, here’s a quick recap of April’s Residential Market Survey.
For the first time since March last year, property demand has slowed. Commentators are putting this down to a couple of developments;
- a revised Stamp Duty tariff on second and buy-to-let homes that came into effect in April, leading to increased activity in February and March
- the uncertainty surrounding the EU referendum. This potentially explains the fairly flat outlook over the immediate post referendum period and the more positive outlook later in the year
Our Chartered Building Surveying business is directly related to the health of the property market. Whilst we are seeing a steady stream of residential surveys but have noticed a slight slowdown over the past few weeks. Hopefully, the predictions of net balance growth of 34% will follow on quickly from the EU result on 24th June. Of course the London market shows some significant differences to the rest of the South East. Average house prices are now above £600,000 for the first time. Mortgage rates are unprecedentedly low and the cost of stamp duty on properties costing less than £937,000 is falling. These factors have all combined, ramping up both demand and prices in the capital. A trend however that most analysts say will soften into next year.
How Will Brexit Affect House Prices
Interestingly, both the Remain & Brexit campaigners agree with this medium term weakening of house prices. However, it is for different reasons. Brexit simply feel prices are already too high which is making it increasingly difficult for first time buyers to get on the property ladder. A vote to leave the EU they say, will help to limit the numbers coming into the country therefore reducing demand. The Remain campaign feel prices will fall as a result of a hit to economic activity and inward investment.
Should I Still Get A Building Survey?
Whichever scenario we wake up to on Friday 24th June, it won’t detract from the essential need for a good building survey. If prices fall and supply improves, buyers armed with a full building survey will be in a strong negotiation position. If, on the other hand, prices remain strong with suppressed supply, buyers must be sure to spend wisely. A full understanding of the present and future condition of their new property is crucial.
To talk to us about your new property, please contact us. We would be more than happy to give you our view of the local property market and share some of our 15+ years of experience of surveying Surrey properties.