In Maskells' June market update, Charles Curran predicted that, following the referendum result to leave the EU, buyers would have a four month window of buying opportunity in Prime Central London. Since then the rhetoric has settled and with the installation of Prime Minister May, the tone has shifted dramatically leading us to believe that rather than a ‘full fat’ Brexit, her government will be leaning towards a ‘Brexit Light’ version.
Charles Curran believes that the window of opportunity still remains because Brexit Light is going to take time and as a result uncertainty will continue keeping property prices in check. The next official set of property trading figures from June sales takes three months to be released, until then no one can validate how the PCL market has been affected.
- Consumer prices will rise and EU white goods manufacturers are already increasing their prices
- The economy is already showing weakness: the purchasing managers index fell to 47.7 in July (any reading below 50 constitutes a contraction). UK PLC is looking cheap – Liberty Global is eyeing Vodafone, now 10% cheaper against the dollar.
- Under the new Chancellor, our twin deficits and net sector public debt balances are likely to increase.
- The rise in the FSTE 100 (up 1.42% year on year) is largely due to market recognition of the constituent companies’ foreign currency earnings versus the FTSE 250 (down 3.6% year on year), which has a greater domestic focus.
- Tax cuts in corporation tax and VAT may be announced in the Autumn Statement to help stimulate the economy.
- Before the autumn, buyers can benefit from the lack of stimulus and uncertainty: euro and dollar deominated buyers are making enquiries and starting to transact.
- Societe Generale’s report that London could see a 40-50 per cent reduction in prices is rubbish because the data they have used is flawed.
- Until the next tranche of relevant official data for June sales is released three months down the line, no one can claim that the market has fallen.
- Maskells reports steady interest and transactions up to £2m from overseas buyers for one and two bedroom flats in prime areas, mainly Chelsea and South Kensington and only a slight reduction in prices of @2 per cent.
- Low bids that represent anything less than 5-7 per cent below current asking price are being rejected.
- Rentals stock levels continue to remain high around 40 per cent higher year on year. Price bands between £700-£2000 per week) are experiencing an increase in demand along with US tenants coming to work in London.