Thursday, 16 September 2021

Brexit vote prompted price drop

DESPITE everyone (bar Londoners) saying they haven’t noticed any fallout from Brexit, Standard Property has noticed

DESPITE everyone (bar Londoners) saying they haven’t noticed any fallout from Brexit, Standard Property has noticed a definite ‘price adjustment’ since the vote in June, writes Lucy Boon.

We’re talking everything from £350,000 houses in the north of Henley, to £3m houses in the south and east of our town — although the reduction figures involved, logically, depend on the price of the house in the first place.

Price drops are most extreme for those that have been on the market for a while, with houses that last year commanded well over the £1 million mark now reduced by up to 30 per cent. Standard Property spotted one that has been reduced by a massive £500,000.

Rightmove “alerts” - email shots of properties that have had their prices “reduced” — seem to arrive in my inbox every day.

So what’s going on? Well according to some, it’s nothing to do with Brexit, and everything to do with the “usual” post-summer price adjustment that is a result of over-valuation earlier in the year. Standard Property has heard a rumbling that some agents even feel their competitors deliberately overestimate prices to win instructions.

Let’s find out what the agents had to say….

One local agent said that, actually, sales turnover had been very high for their company, and the values good. They said: “Value drop and marketing price drop are two very different things, and one could speculate that agents keen in the earlier parts of the year to gain new instructions might have over-valued to quote higher marketing prices than had been achieved in reality, hoping that the market would go up, which in a referendum year it didn’t.”

Referring to the market above £1.5 million,Nick Warner, Director at Savills in Henley, was happy to be quoted and agrees: “We feel some market confidence has recovered, and whilst prices have been adjusted, this is more in relation to the underlying stamp duty/transactional cost increase in the market above £1.5 million; and possibly because of generally optimistic pricing rather than a clear change in the market since the Brexit decision.”

Phil Booth of the local agency of the same name told Standard Property that the Brexit question was, in fact, a very difficult one to answer because of the timing of when the vote took place. He said: “I have been an agent locally for 28 years and it’s the same every year. During the months of July and August the local housing market slows down, particularly in the Henley area with the Royal Regatta and now Henley Festival being such large events and local buyers and sellers are otherwise engaged. This is closely followed by children breaking up from school and naturally people will take their summer holidays.

“However, house sellers who weren’t fortunate enough to find a buyer in the early summer market, will want to make the most of the next selling period between, mid-September and mid-November, and will want to make their property more attractive to new buyers or those revisiting the market by cutting their cloth accordingly.A price reduction could be part of their estate agents strategy to increase levels of interest and the number of viewings and is quite usual at this time of year.

“This has nothing to do with Brexit and I am sure if you looked back at the same period over the last few years, there would be a similar pattern.”

This is in line with recent findings by the Royal Institute of Chartered Surveyors. It’s latest forecast suggests that house price growth will increase at around 3.3 per cent each year over the next five years. Combine that with the fact that there is a great underlying strength in the local market with many more buyers registered than houses available, and you can see the market is, as always, looking very strong.

Phil adds: “There are still plenty of motivated buyers in the market, but at present I am experiencing a lack of new properties coming to the market, with many potential sellers not wanting to dip their toe in the water until they have identified a property to move to.”

He adds: “That’s where there are benefits to using the services of an estate agent who is not driven by market share and large stock levels because they have the time to match make seller and buyer with many sales taking place off market.”

Another local source said: “I wouldn’t say that Brexit is the problem - more a combination of stamp duty and press reports over-stating the market, ie ‘actual growth’ against ‘reported growth’ are two very different things. For example, some, hypothetically, might have reported the market has grown by 12%, but in reality it may have only grown by 6%, therefore there is just a rebalancing going on.

“I think Brexit, if it has had any impact, has made people initially a little nervous but I think people are just getting on with life,” continued the source. “Money is still cheap to borrow and mortgages are readily available. We just need more stock priced correctly!”

At brand new local agency Penny & Sinclair in Hart Street, Branch Director James Donigan is also of the opinion that it is not unusual to see house price reductions at this time of year when sellers are re-invigorated after a summer break, and motivated to move before the year end.

He said: “Of course, post-Brexit, all eyes are on the housing market, with a few exceptions - most notable London which has been affected but jittery overseas buyers. However, there is no data to suggest a downward trend in the local market - far from it! We are actively campaigning for more property to sell.”

As we went to press, Anne Ashworth of The Times’ Bricks & Mortar supplement said: “The Brexit vote has not caused an abrupt reverse in the market’s direction, but there are forecasts of a dip in 2017.”

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