Junaid Iqbal Mohammed Memon On Brexit Uncertainty


Falling Property Prices Tempting Despite Brexit Uncertainty

What effect will the increasing demand for homes have on the London property market when we leave the EU?  Falling house prices are tempting homebuyers to gradually return to the property scene in London, despite the increasingly uncertain departure of the country from the EU.
Property doesn’t come cheap – and may rise further.
Photograph: Arsty/Getty Images/iStockphoto 

While the average asking prices for properties in the capital were about half a percent lower compared to the figure a year ago at £616,500, recent reports show that there has been a recent increase in buyer activity. Property experts are saying that this could be an indication of the start of the property market’s recovery. The national index shows that prices across the country are higher by 1.2% compared to last year at £304,000.

Jitters concerning Brexit have been recently fuelled due to dire warnings about a 35% drop in the property prices in just a span of three years if a no-deal Brexit is going to emerge. However, estate agents have contended that regardless of the economic state then people are still going to make a move where the property is concerned.

The market for first and second-time buyers are certainly those people that are quite conscious about Brexit. This is expected to affect the rate at which they will make their decision. However, it is also a fact that they are moving forward. Of course, it cannot be avoided to see buyers who are using the uncertainty brought about by Brexit as a tool in order to get a better-negotiated deal as far as agreed price goes.

Meanwhile, agents across the capital are seeing an uplift in terms of buyer inquiries as well as agreed sales in both July and August. There has been an 18% increase in buyer inquiries compared to the figures recorded for the same period last year. This is a good sign that there is indeed motivation among buyers to check out what the market has to offer and come back.

Cottage in Yorkshire, where property prices are increasing Photograph: Ian Forsyth/Getty Images

Conversion rate has also improved. The number of viewings that buyers require before making an offer has significantly gone down as well. This means that the conversion rate has definitely improved. Renewed buyer appetite follow rice falls that went on for two years due to a rapid increase of more than 50% from 2011 to 2016. Asking prices have been down in 24 of the boroughs in the British capital from the start of the year until September.

According to Junaid, some people are trying to temper down expectations though stating that while the recovery is encouraging, it is also important to remember that the process concerning price reductions, which can be such a drawn-out and lengthy process, will likely run its course in various outer parts of London. Sellers and agents will likely need to get their expectations readjusted especially with buyers being out there making sure that the price they are getting is right.

 Junaid Iqbal Mohammed Memon is an experienced businessman and property developer based in London who owns several properties and businesses ventures in London and Dubai. Keep abreast with the latest in the property development market by reading about Junaid Iqbal Memon online. You can also follow the Junaid Iqbal Memon on Facebook

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