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Market Review For 2016

 
 
 
 
  10 Dec 2016

2016 will be a year that is looked back on with many extreme views. The death of so many popular musicians and celebrities means that the year will forever be tinged with sadness for many people and in the UK, the EU Referendum has had an almighty impact that may affect people in the country for many years to come.

Even without this, the property market in the UK has had a tumultuous year with many different issues leaving their mark on the market.

Introduction of additional stamp duty for people who already owned property

The introduction of an additional 3% stamp duty for people who already owned property came into effect from April of 2016. This change had a big impact on the property market, both before it came into effect and then after when its impact was being fully felt on the market.

Before the change came, there was an incentive for landlords and property investors to conclude deals before April. Anyone who was thinking about buying more property knew that they could save money by buying before the change came into force, so the demand for property in the opening quarter of 2016 was evident. The sellers knew this as well and there was a notable rise in property sales in January, February and March of 2016 as buyers swooped in at a more affordable rate.

This was going to lead to a fall in property sales in April onwards. This is because some investors would have been put off of buying property thanks to the additional 3% stamp duty charges and there would have been investors who had already bought all of the properties they were hoping to buy. Over the course of the year, the increase and then decrease in sales for a given month because of the additional stamp duty probably balanced out but it frontloaded deals for the year.

Uncertainty in the lead-up to the EU Referendum

Of course, while the property market was dealing with a dip due to the additional stamp duty, there was the uncertainty that faced the UK in the run-up to the EU Referendum. There is enough evidence in the property market in the lead-up to significate votes and elections to know that many people will not buy at this time.

When there is uncertainty over what the future holds, you can see why people don’t want to commit to a major investment, and this meant demand for property stalled in the second quarter of the year.

The Brexit fallout and the falling £

With Britain voting to leave the European Union, the market responded badly. Brexit still hasn’t been put into place and it seems as though there will be another Scottish Independence campaign, which creates further uncertainty in the market, so there is still a high level of uncertainty about what will happen. This means many people are still holding off from investing in the property market.

There have been some changes though and the falling rate of sterling has left its mark on the property market. Property developers who export materials from overseas are now paying a higher price for goods and materials, which may cause some projects to be halted or revised.

While all of these issues seem to slow down or decrease demand in the property market, there has been one issue that has led to a rise in demand for UK property. As foreign investors now get more for their money when they deal in sterling, there is a higher level of demand for UK property from foreign investors. This has managed to offset a fall in demand for property.

Announcement that the Help To Buy Mortgage Scheme will end

In September of 2016, it was announced that the Help To Buy Mortgage Scheme will stop at the end of 2016. This scheme has enabled lenders to provide loans to people with just a 5% deposit. This scheme has been supported by the Government but there has been a gradual decline in the use of the scheme. This is partly down to the fact that there are a number of lenders who provide this style of mortgage without the need for Governmental intervention.

Even with a few months left to play out, 2016 will be remembered as one of the most eventful years in British history and the property market has borne the brunt of these issues on a few occasions.

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Jezzards Estate Agents



 

 

Jezzards properties Hampton

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