Confidence in the UK housing market has weakened in recent months amid economic uncertainty, together with pressure on householders’ finances from weak earnings growth, higher inflation and tax rises. However, despite this deterioration in sentiment, record low interest rates continue to help to support the market, although property deals are now ‘subject to price sensitivity’, according to a leading expert.
Gary Murphy, partner and auctioneer at Allsop, reports that confidence in the residential market “has been knocked” by what he described as “aggressive taxation” and “the Brexit vote”, but insisted that trying to identify particular weak spots is difficult.
Reflecting on recent activity in the housing market, including Allsop’s December auction, held at the Cumberland Hotel in London, raising a total of £46m with a success rate of 71%, he stated: “Higher value central London stock has definitely been hit and so it seems have poorer quality lots in the North and North East.”
The highest value lot to sell under the hammer in London last month was a freehold five storey corner office building in Southwark with possible potential for conversion to residential under permitted development rights, which sold for £1.6m.
“Deals are clearly subject to price sensitivity now,” said Murphy. “But, when vendors embrace the process and set reserves on our advice, there are some strong results to be had.”