Pre-Brexit Property Market Surges

Figures put forward by property portal Rightmove indicate the UK’s property market has entered what many are calling a pre-Brexit surge. Selling prices have recently softened, and more buyers have entered into property transactions. As a result, the market has hit a seasonal high not seen since 2015.

Rightmove’s data goes on to suggest that the increase in contracted property sales is affecting every region in the UK, with the 6.1% rise overall manifesting as:

• 6% in North East,
• 7% in the East of England,
• 1% in Yorkshire and the Humber

Unsurprisingly, this surge in property dealings has led to a significant backlog in getting sales legally completed. But the real question on many people’s minds is: what’s behind all the urgency?

Seasonal Price Drops Are Normal

According to industry experts, there’s nothing unusual about property sellers reducing asking prices over the course of the summer. In fact, this trend regularly reflects the homeowner’s desire to move before school holidays end.

This summer, however, has seen property prices decrease by just a single percentage point – rather than by the 2.3% we saw last year.

Not only is it likely that a greater demand for property is keeping prices propped up – it’s equally possible that demand is being fuelled by October’s looming Brexit deadline.

Is Brexit Fuelling Property Market Activity?

Yet another Brexit deadline may be nothing new for buyers, sellers, and property development companies looking to invest in the UK market – but there’s every indication that this time the new Government intends to see things through.

So, while Brexit outcomes – as always – remain uncertain, many people are choosing to sidestep at least some of that uncertainty where a post-Brexit property market is concerned.

Here’s what we’re seeing:

• More buyers are taking the property plunge (with some using bridge loans to cover mortgage delays),
• More vendors are amenable to selling for less, and
• Buyers and sellers alike appear united in their drive to seal the deal and complete their moves before the end of the year

On the one hand, reports suggest that buyers are rushing to take advantage of diminished prices and a more realistic seller perspective. On the other, sellers are extremely motivated to get transactions completed before the Brexit deadline hits.

But there’s another factor that may be contributing to the heightened sense of urgency surrounding the property market: stamp duty reform.

Stamp Duty’s Role in Market Urgency

Boris Johnson’s formal plans where stamp duty land tax reform is concerned are still up in the air, but suggested amendments have ranged from:

• eliminating the tax outright on homes worth £500,000 or less, to
• dropping the 3% levy on 2^nd property purchases – a move that could impact the buy to let mortgage market

While nothing’s for certain, change of some kind appears imminent.

Rather than waiting around to discover what that change might mean for them going forward however, many buyers and sellers have decided to take a pre-emptive approach to market uncertainty.