It's no secret that property prices took a hit after the decision to leave the EU. Any investor out there knows that the markets don't take kindly to uncertainty - and the result of the referendum definitely plunged the country (and the EU) into unknown territory. Immediately after the result was announced, stocks and shares began to quake and the pound dropped. Property prices also reportedly tumbled, with people selling a property in London slashing their prices to ensure a sale.
But just how serious is the departure from the EU for property? According to Rightmove, there has been an average drop of 0.9% (around £2,647) in asking prices in the UK since the vote to leave. In London, the picture looks similar, with research company LondonRes claiming the number of cuts to prices surged to 163% in the 12 days following the announcement. In a recent interview with the FT, the MD of LondonRes told the newspaper, "if someone needs to sell now, they are going to have to take a bit of a discount".
But 'selling now' is not necessairly an issue for those people looking for a long-term outlook or prediction. Although there has been a clear drop in prices or completions within London, some experts have encouraged calm among home owners and property sellers by claiming the slump will be short-lived. If we compare the property price drops to the shift in the value of the pound, for example, this could be a knee-jerk reaction to the vote which will soon even out.
In addition, some experts have attributed a slow down in London property to the Chancellor's hike in stamp duty charges, saying that the new taxes are stinging purchasers to the point that they choose to stay put or invest money in other areas. When you consider factors like this, our decision to 'Brexit' is only one chapter in the story.
Knowing the full reason for movements in the property market is always a guessing game to a certain extent. It's hard to predict where they will go from here, especially as this is the first time the world has had to deal with such a prominent member of the EU deciding to leave. But if uncertainty is the enemy, property owners should feel relief that Theresa May is now officially in her new post as Prime Minister. Having a leader and Cabinet in place, a clear direction for our economy and someone to manage the formalities of our 'Brexit' will surely calm some nerves and help prices recover.
Are you thinking of selling property in London? Are you keen to know what your property is worth? Outlet helps people to sell their homes quickly and for the right price every day. To discuss a free, no obligation valuation, call us on 020 7287 4244. We'll even bring you doughnuts. Find out more about that here.