London property market forecast 2018? Our experts advise
As the go-to experts for London’s exclusive mews marketplace, Lurot Brand’s General Manager James Robinson and Head of Lettings Lyndsey Schiffer are uniquely qualified to reflect on last year’s property highs and lows and let us know what to expect in 2018. Read on for their perception of the London property market.
Mews review 2017
During 2017 factors such as the Stamp Duty hike, the Tenant Fees Bill, capital gains tax increases and last – but certainly not least – the uncertainties generated by Brexit combined to create a unique set of challenges for buyers, vendors, landlords and tenants. James Robinson says, “as a specialist agency operating within a niche market, we remained confident throughout 2017 that we would not only survive, but thrive. Our optimism was rewarded in the final part of the year, when two thirds of our predicted annual sales were transacted in just four months.” 2017 was a tough year for prime London property, but every cloud has a silver lining. James Robinson has suggested that a number of economic factors – including a decline in the City’s bonus culture – have combined to put an end to the traditional ‘seasons’ for property sales and vendors are now free to sell according to their own needs and personal circumstances.
There’s good news for buyers, too. James explains “the choice of properties is growing, so they are recognising that the really good quality houses, which used to be snapped up during a bull market, can now be agreed at more attractive prices with less competition and less chance of being gazumped.”
Although lettings performed well during the first half of 2017, Lyndsey Schipper admits “until such time as there are foreseeable consequences of Brexit, the market will remain in limbo.” She is aware that tax changes affecting buy-to-let mortgages have caused concern, but points out that the effect on landlords’ pockets may not be as dramatic as initially feared. “Arguably, the 2018 25% reduction of mortgage interest tax relief will have less actual impact than the headlines have. It is widely believed to be a total immediate loss, in fact 75% will still be tax deductible, with a sliding scale reform planned between now and 2021.” Looking forward to 2018, Lyndsey believes that this will be the year when new initiatives – including tighter vetting of mortgage lending for landlords with multiple properties – will help to guard against the dangers of a property crash.
So what can we expect in 2018?
Both Lyndsey and James believe there are reasons to be cautiously cheerful as we enter 2018:
1. Three of the most expensive London boroughs – Westminster, Kensington and Chelsea – saw property sales boom by 20% in the third quarter of 2017, and it is believed that this late surge shows that momentum will return to prime London house prices in 2018.
2. On a national basis UK house prices showed an unexpected rise of 3.2% this month, which probably indicates that lack of supply is still driving demand.
3. We are currently benefiting from a period of strong global economic growth, which should help to keep the property market on track despite the two small interest rate rises predicted for 2018.
4. There’s better news for tenants as average rents in London fell by a small amount during 2017 and few expect major increases during 2018.
Recent surges in activity may have given cause for optimism but, both Lyndsey and James feel the key sentiment this year will be ‘steady as she goes’. Now, more than ever, it’s important to get the right property advice, and as London’s only specialist mews estate agency Lurot Brand is ideally placed to help.
If you need guidance on buying, letting or renting a mews property, simply get in touch for an informal chat or call in to our offices in Hyde Park, Notting Hill or South Kensington.