Do you think the effects of Brexit will be long-lasting in the UK? Well, they are certainly. You can see the market scenario even today after a considerable time has passed after Brexit, the trend looks to be bearish.
Property rates have been tumbling at quite a fast rate as compared to the massive crash in 2008. Property experts fear that the decline will be further looking at the international scenario.
It is expected that the top-quality London houses and villas will be available at 20 percent or further low prices as compared to last year.
The volatility in the market is not only alarming but a matter of concern for investors. An investment that has always been considered ‘safe’ now loses the confidence of people.
It busts the myth that property prices in London move only upward!
Yes, the recent movements shattered the belief that you invest in a property in London and there will be only appreciation in its value.
Statistics and figures reveal that with the downfall in the GBPUSD prices, the price index of properties showed a heart-pounding thump of more than 20% as compared to the high in 2015.
Experts feel that one of the big reasons behind this fall is the fear of international buyers who have been sharing a big chunk of the market share.
Price fall has frightened many big buyers who have deep pockets. They are postponing or canceling the buying decision altogether.
Therefore, even if the rates slashed by 20 percent or more, nobody wants to take the risk of investing.
London property has been an appreciated asset class worldwide
Look at the charts of previous years, and you will realize that London property has always been a favorite category of investment. Not only local investors, but international investors also acclaimed it.
Some of the properties showed whopping 50-times (yes, you read it correctly) in the past four decades.
However, it seems that the amazing rally will take a screeching halt now. International situation, political turmoil in the country and newly imposed taxes on transactions are some of the catalyzing factors that push the real estate market into the negative zone.
The recent trends reveal a strange story
If you look at the latest trends prevailing in the London property market, then you will discover a few strange phenomena.
Firstly, all good high-rise buildings are creating a great Gung-Ho about two, three or four bedroom flats. It shows that plenty of flats are vacant.
At the same time, a lot of new properties are under construction.
There is another critical factor that often remains unnoticed. The average increase in the inflation is around 3 percent per annum, and the rate of increase in the rent is also 3 percent.
It means, effectively property owners get nothing year on year. It brings the motivation factor of owning a property just for the sake of rent up to zero levels.
All these aspects put together, it is quite clear that the rates and demand for new properties will come down further unless the situation gets a quick heal.