As we confine 2017 to history and look forward to 2018, I thought it would be useful to reflect on the year just passed and look forward to the year ahead.
In 2017 the overall sales market was fairly flat in terms of activity. Nationally over 1.2 million transactions took place but the market was much slower in Central London and the “ripple effect” moved outwards from there.
New home builds are rising but, whilst over 200,000 were achieved in 2017, this still falls way short of the numbers required. The Government, in its November Budget, talked of plans to create 300,000 new homes a year by the mid 2020’s. We shall see.
Changes to stamp duty at the end of 2016 has undoubtedly slowed activity at the upper end of the market (Stamp duty became cheaper than before below £937000 and more expensive above) and the punitive 3% surcharge on purchasing second homes seriously dented the Buy to Let market with many fewer landlords adding to their portfolios.
A by-product of the stamp duty changes and, one that was desired by Government, was an increase in first time buyers and this will accelerate in the coming year following the November Budget when stamp duty was completely removed for first time buyers buying up to £300,000 or removed on the first £300,000 on a purchase up to £500,000.
Of course, Brexit dominated the economic and political headlines, and the uncertainty created as we negotiate our exit will continue during 2018. This has resulted on a certain amount of “sitting on hands” and “wait and see” amongst those who might otherwise have made positive home moving plans.
Life does, however, go on and I expect more people to put any fears about Brexit behind them as 2018 progresses. Indeed, towards the end of 2017 we started to see more activity in the £1 million plus price ranges and we made a number of sales in Highbury in the £1.1-1.3 million range in the last quarter. Harringay also saw a healthy number of larger £1m plus homes being sold on the popular “Ladder” throughout the year, however we did not see the usual number of first time buyers until very late in the year following the November Budget.
Palmers Green also saw a stronger end to the year with young families who need to move and first time buyers coming to the fore.
One reason for making a property purchase sooner rather than later is interest rates. We saw the first upward movement for ten years towards the end of 2017 and the “direction of travel” is definitely upwards. Making decisions early will enable purchasers to “lock in” a better fixed rate than if they wait.
The lettings market remained much stronger than sales throughout 2017 but also saw some softening of rental values by as much as 10% in some areas. Demand does however remain strong and I feel certain that, as the position for those from EU countries becomes clearer and more certain, there will be a greater level of commitment shown to enter into tenancies. This is likely to see the balance between supply and demand shift again and rents will undoubtedly harden.
At Anthony Pepe we were delighted to open our fourth office in August in Crouch End. We merged with the areas longest established lettings agency, Hornsey Agencies, which was established in 1958. In December we added a sales department to the office.
Crouch End enjoys a tremendous synergy with all three of our other offices and many of our buyers in the Highbury, Harringay and Palmers Green areas upsize from flats in the Crouch End area.
Dino Capsalis joined the Anthony Pepe family after running Hornsey agencies for many years and we are excited to be working with him as we look to add sales to our services in Crouch End and also improve on the already very large and successful Lettings and Property Management department.
Finally, we expect the positive signs we have seen towards the end of 2017 to continue in 2018 as the market has been adjusting for a couple of years now and seller and buyer expectations are more realistic entering the new year than they were a year ago. The same is true for landlords and tenants.
Correct pricing, great marketing and good solid customer interaction will remain the keys to success. Our team always look to understand our client and customer needs and find ways of creating positive transactions whether selling, buying, letting or renting.
More positive news on Brexit seems to be emerging and it would appear we are shifting towards a softer rather than a hard Brexit, albeit there are a lot of miles to be clocked up on that journey before March 2019. This again can only be good news for the economy, confidence and in turn the housing market.
As always the team and myself are here to answer any questions and help you with your moving plans.