Jake Russell, director at Russell Simpson, offers his thoughts on what property market trends we can expect over the coming year.
Much like 2014, 2015 and 2016 - the UK will begin the New Year with an opaque and uncertain future ahead. As with the Scottish referendum, the general election and the EU referendum, the forthcoming year will be dominated by yet another landmark political event in the triggering of Article 50.
As with any trading market, uncertainty breeds caution and indecision, and as such we can expect continued low levels of activity. Overshadowing this, however, is the toxic and destructive levels of Stamp Duty Land Tax, which must be reconsidered by the government. Ultimately, it will be our job to bring clarity to the confusion that exists in the marketplace, and to provide solutions that suit each individual case.
In terms of market performance, the product of the above makes for a simple equation – we expect minimal to 0% price capital growth in property prices in 2017; a prevailing opinion shared with a number of the other key plays in prime central London.
On a positive note, the desire to live in London remains as powerful as ever and so property will trade provided it is correctly priced. Advice, guidance and hard work from local experts will prove more important than ever in helping to navigate and harness this unpredictable and confusing environment.
Areas of London to prosper in 2017 will be landmark developments with unique USPs – exceptional views, riverside location, place-making components etc. Therefore, projects such as Battersea Power Station, One Blackfriars and Southbank Place will – we believe – be incredibly popular, as investors look to put their money in a long-term project with strong growth potential, whilst the UK aligns itself and finds its new position in the world post-Brexit.
Stamp duty and price difference will also play a role throughout the year, if SDLT rates remain the same then we’ll continue to see a lot of activity in the sub £5 million market, whilst conditions at the super prime end of the scale will remain a challenge.
Areas such as Battersea will continue to draw in buyers, whilst prices remain attractive compared to PCL – on average property prices are 32% lower than Chelsea, despite being just a short walk over the bridge and on the cusp of becoming London’s newest destination.