Every week, City A.M. invites an industry professional to write about an emerging trend in the property market.
While the Chancellor’s taxes have affected the number of property transactions in Prime Central London, this is not the chief spanner in the works being cited by prospective purchasers. That would be a fear of Brexit, which is being quoted by most of our serious buyers as the reason for their procrastination when it comes to committing to a property purchase.
This would make perfect sense if these buyers had plans in place for either eventuality, however they do not; it is simply that the dinner party advice is not to buy, or indeed sell, until after the referendum.
In 1815 the banker Baron Rothschild earned a fortune buying against the market after the Battle Waterloo, stating that one should, "buy when there's blood in the streets, even if the blood is your own." While I am certainly not claiming that a Brexit would be another Waterloo, the school of thought that says there are better opportunities for profit when most buyers are either too faint-hearted or too dead to buy, is as true now as it was then.
More recently Warren Buffett warned, "You pay a very high price in the stock market for a cheery consensus." In other words, if everyone agrees with your investment decision, then it's probably not a good one. So if one waits for a boom market to buy, as in 2014, you will always miss the window of opportunity when you really should have bought and will always have to play catch up in a market where you have little choice and no bargaining power.
It is the norm in these times to be bid up, outbid or gazumped as there are too many people chasing too few properties. In fact, the only people who truly benefit from a boom market are sellers who are not onward buying, but anyone who is will, of course, be paying more themselves.
Personally, I do not think a Brexit will make much difference at all to our market. I think, for a while, we will see prices pretty much level, with just inflationary growth until 2017.
Contrary to perceived wisdom around the dinner table, I can report that we are, in fact, experiencing what can only be described as a very normal market considering, and there is certainly nothing wrong with that.
The Land Registry is reporting that the number of house sales in both Westminster and the Royal Borough of Kensington & Chelsea has fallen by around a third since 2014, although property prices achieved remain unaffected.
Asking prices often start high, but as Rightmove and On the Market have reported, they’re starting to come down now, yet sale prices continue to remain robust.