London property defies Brexit doom-mongers
London house prices have continued to rise immediately following the Brexit vote, contradicting predictions of a fall following the UK’s decision to leave the EU.
The latest data released by the Land Registry, shows the average London property has risen by 1% in July to £484,716. At this level, properties have seen an annual increase in value across the capital of 12.3%.
The Land Registry did, however, add the caveat that some of the transactions covered in this latest release could re ect prices that had been agreed in the weeks immediately before the Brexit vote. Furthermore, average prices in some of the most expensive parts of London, such as Kensington and Chelsea, were in fact lower, down by 3% annually to £1,287,850.
At the opposite end of the spectrum, properties in Newham saw an annual increase of 20.8% to £359,231.
Some buy-to-let options may ‘become unviable’
A recent research paper from property market analysts ‘Hometrack’ has highlighted the fact that buy-to-let (BTL) landlords are nding it increasingly di cult to justify reasonable returns for two and three-bedroomed properties.
The main problem is the increasing limitation mortgage lenders are placing on such purchases. These include more stringent rental income criteria being put in place before o ering funds, following the Bank of England’s consultation process undertaken in March this year.
Several lenders have increased the rental income required for loans from the current 125% of borrowing to 145%. Some lenders are even considering increasing this benchmark to 155%. Furthermore, they are looking at ensuring the a ordability of such mortgage advances only after applying a 5.5% ‘stress rate’.
Scottish Prime Residential values up 1.3%
Savills recently released ‘Spotlight’ on Scotland’s Prime Residential Property Market revealed that there has been a negligible change in Scottish prime (£400,000+ properties) residential values in the last few months. According to the Scottish Prime Index, values are currently 1.3% higher than in 2015.
However, the report highlights that in the summer (July and August), 30% more new buyers have registered with agents and property viewing gures have increased by 40%, compared with the same two month period last year. The report also emphasises that a third of new buyer enquiries have originated from outside Scotland.
Savills deduce that many Scottish buyers seem eager to get on with their lives and are more resilient with the changing political landscape, having experienced various elections (General and local) and two Referendums, hence the uptake in interest in residential property.