Yet again we find ourselves in the situation that everyone who is in the know says that we are hitting hard times with the property market as a result of Brexit, well, Brexit is still not here and nor is the crash that the “experts” were predicting. Things went right to the wire for the March deadline but the market here did not react, if anything, here at Cross Keys Estates, we witness a substantial rise in the number of sales that we have agreed over the last few weeks.

According to the Royal Institution of Chartered Surveyors (RICS), uncertainty over Brexit is likely to have an impact on the UK housing market. RICS believe, and have come up with a report, that the number of properties being sold and the prices that they will achieve will fall next year, they say that fewer people are interested in moving, and fewer want to sell if they cannot reach the price they want for selling their property. House prices are predicted to increase this year but only by 1.5%, this is well below the rate of inflation. In essence, this equates to a price decrease.

Having multiple offices in Plymouth means that Cross Keys were able to look at all types of properties across the price spectrum and in all cases we witnessed levels of interest that were quite surprising. Our Stoke branch had no less than 12 sales in just four days last week, this certainly goes against the RICS theory of property sales and property prices going down!

The most interest and sales came yet again from the family homes sector at prices ranging from £150,000 to £300,000, but the biggest increase in buying was in properties that ranged between £300,000 and £500,000. This leads be to believe that no matter what is on the horizon for our country and whether we stay in the EU or whether we leave, family life still moves on and so does the need for quality houses.

Upsizing seems to be the way ahead for the majority of our buyers, previous first time buyers are realising quickly that with mortgages being as affordable as ever, it is quite an easy transition to move up that housing ladder sooner rather than later. We have had some fabulous sized period properties lately that have been on the market for as little as one week before being snapped up by discerning buyers looking for that perfect lifestyle change as larger properties are able to offer a more sociable lifestyle that is very much en vogue at this moment in time.

Stamp duty rates are affecting the lower end of the market with landlords still reluctant to put their hands in their pockets for the 3%, 5% or 8% rate that any buyers have to pay for any second or more properties, for instance, If they buy a flat or an apartment at £145,000 then they are looking to pay £3,750 on the first £125,000 which is at 3% then £1,000 on the remaining £20,000 (£125,000 to £145,000) which is at the rate of 5% meaning a total of £4,750 in total. This amount of money normally equate to the first 2 years profits from any rent that they may earn, so it makes the Buy-to-let market a very disappointing place to be at this moment in time.

As for houses (main residences), the stamp duty rates are as follows:-

This is how to calculate the new Stamp Duty Rate. If you bought a property for £850,000 you would pay no stamp duty on the first £125,000, then 2% on £125,000 to £250,000 = £2,500 then 5% on the remainder above £250,000. (eg: £850,000 – £250,000 = £600,000 = £30,000. Totalling £30,000 + £2,500 = £32,500).

All of these figures may seem daunting to you, but at the current rate of property price increases, these figures are being made back in the price rises in under a 12 month period. As for our silver seniors, there is a little change in their circumstances. State pensions are due to rise by around £4.25 a week or £220 a year from April 2019. This means that it will rise above the rate of inflation, thus giving pensioners a welcome boost to their earnings and help with living costs.

Well what can we say about the housing market, it has been a bit of a merry-go-round the last 12 months and looks to continue to be excitable for the next 12 months.

Brexit has dominated my clients conversations increasingly for the last few months and I am continually being asked for my opinion on what impact that this will have on the housing market, I will endeavour to answer this in the most simplistic of ways towards the end of this article.

After the last recession, when property price went in to freefall, it took several years for them to level out and several more before we saw any increase. During this time we saw repossessions increase and a lot of forced sales as the rising cost of living, wage cuts/no wage increases meant that people were needing to sell properties and in a lot of cases at lower prices than they had been bought at. 2014 saw the first signs that there was a recovery on the horizon and now in 2018 we have seen that the property prices for houses are back to similar or even better values than before the recession, unfortunately that cannot be said for flats and apartments here in the South West. When the government introduced the higher stamp duty requirements for all second properties, the buy-to-let market was to all intents and purpose brought to a halt. This added increase has stopped landlords in their tracks and unless they could get the properties at knock down prices, they, in the majority, have decided to wait things out and see where else their investment should go.

First time buyers are now not as one would expect. Previously fresh faced 20 somethings looking to start their home owning lives either as singletons or as young couples. Now with rent costs spiralling, wages not increasing as they should and unable to save a sufficient deposit for the rising costs of houses, they are staying at home longer to save on their cost of living. Now first time buyers are in their 30’s, partnered up and in some cases with their own families. Dual incomes now mean that they can afford to jump past the first step on the housing ladder and target the mid range family market instead. A lot of our 3 and 4 bed family homes are currently being sold to these older first time buyers.

On the older side of this equation, we find the true cost of the low interest rates. Most of the more settled home owners have climbed the housing ladder and now sit close to the top. Looking at the time of their lives where they are nearing retirement, the question of how they are going to pay off their living expenses becomes increasingly worrying. Previously our savings and pensions should have been able to provide sufficient funds, but seeing as how the interest rates have stayed pretty much frozen since April 2009, pensions cannot be guaranteed to cover these costs. On the flip side, the cost of living has continued to rise year on year which has created an imbalance for many and forcing them to revise their plans and in many cases they are “downsizing” to more modest properties with reduced running costs and thus able to bring the living expenses in line with their reduced incomes. Again we find the mid range family homes are popular for this, which brings me to the conclusion that the reason for the main increase in value for the family homes in this area is down to supply and demand. Plymouth house builders are not building enough 3 and 4 bed family properties and therefore when Cross Keys Estates gets a house in this criteria come to the market, they are usually sold in a matter of days, sometimes even the same day that they come to market and more than often at the top of their price range and even sometimes over asking price.

If we go back to the first point “Brexit”, all I can say is what I believe. I do not feel that the housing market will go down, even if we leave on the WTO option (No Deal) will there be a cliff edge disaster? When we had the referendum 2 years ago, the general public was warned of an immediate recession and disasters that would cripple us and bring our country to its knees. Did this happen?, No it did not and the opposite has in fact happened. If/When we leave the European Union, will major European companies stop trading with us?, will we stop buying Mercedes / Volvo / Audi / Volkswagen  cars?, I don’t think this is the case. The comparison I am trying to make is that although due to uncertainty, the property market may “Slow down”, I am confident that the property prices will not “Go down”.