Market in Britain seems to be cooling as the frenzy surrounding Brexit votes and increased property taxes dies down. The latest to evince this is Barrett announcing 10% dip in their high-end property prices. The house-building giant confirms what the market watchers have been claiming all along.
Referendum on 23 June brought about a rapid dip in demands for new home but the real estate market is bouncing back by all indications. Builders and the market surveys all agree on this point.
The results of Brexit vote led to a marked increase in the property taxes for second homes and buy-to-let establishments. This affected properties in central London, some of the wealthiest areas more. Investors and prospective buyers looking for rental income invested in cheaper homes. Wherever possible they also pushed for the price cuts offsetting higher taxes.
David Thomas, CEO Barrett, admits that at £ 600,000 ($ 750,009) price points especially when one moves over 1 million, slowing of the London property market is quite evident.
Leaving European Union contributes up to 9% price fall in central London, the prime location. This includes luxury apartments, mansions in Knightsbridge, Chelsea, and Notting Hill. Savills, the well-known estate agents noted this fact.
Thomas attributes market softening to increased choices for the buyers. More homes come up in the market. Also the property tax and stamp duty increased. According to him, this leaves more impact than the Brexit vote results.
In Britain, the consumer confidence depends upon the prices of property. This being the most valuable asset, the rising home value for them is the barometer of the country’s economic strength. It is no wonder that the biggest political agenda now is increasing complaints regarding home affordability.
Average home price is approximately £ 220,000. A large selection of consumers is unable to buy properties especially in the capital city.
Thus, even when the large house builders rave about strong growths currently, a mixed picture of progress emerges through signs from the commercial market. As the investors start pulling fund cash, following Brexit, commercial properties were the first to take the big hit.
British Land is a property company based in Britain specialising in office spaces and the retail industry. The portfolio value for the company fell by 3% on Wednesday.
At GMT 1053, even Barrett shares fell by 2.8%, to 469 p and British Land shares were down by 2.1% to 593 p.
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