James Robinson, General Manager of Lurot Brand, looks at the property market post Brexit Referendum and concludes that Prime Central London properties will still be in investors’ wish lists.
As expected we have been inundated with calls from both sellers and buyers (and from journalists!) asking how the Brexit Referendum result will affect the property market. We could debate for days whether this is a seller’s or buyer’s market however it is said that the best way to predict the future is to study the past.
Long Term Investor Post Brexit Referendum
Unless you can take advantage of a running scared European seller, mid Brexit is probably not the best time for the short term speculative property dealer looking to flip properties for huge profits. However it is a good time for the long term investor/owner occupier looking to buy the best property in the best locations with less competition at more sensible prices.
In the late 1990’s a friend of mine, certain that the market was about to crash, sold his house at the peak of the market. His intention was to rent until the imminent crash when he would make a killing. He is still renting. The temptation remain out of the market and rent should be avoided as you will squander in rent whatever you may gain by trying to play the market plus you will miss the moment when you could have made the necessary gain to make it worthwhile.
Prime Central London Post Brexit Referendum
Unlike any other investment a Prime Central London house is on every investor’s wish list. Not only will it keep rising in value it will normally have some kind of development opportunity (which if you live in it will bear tax free gains) and it will always let well.
Since London was built its houses have always outstripped wage growth. House price growth in Holland Park Mews ranging from their original 1870 sale price of between £85 – £147 to our recent record for the mews of £3,310,000. Growth ran at £83 per year when the average middle class wages were a steady £150 per year and this period included two world wars and a great depression!
Through the most recent generation, 1991 – 2016 prices have leapt to an astonishing £3,000,000 in value, an average increase of £120,000 per year, while the average London wage is currently running at £48,000 per annum.
It has been long said that if you earn more than your London house appreciates you are doing very well indeed. The average ownership of a London house is ten years and in that time houses in Holland Park Mews have doubled in value which is £1,500,000 tax free pounds.
The year before Credit Crunch of 2008, Holland Park Mews averaged sale prices of £1,570,000. However by 2011 they had increased to £1,810,000. Only one house sold in the blood bath of 2008 and it fetched a paltry £1,001,000.
So my advice is take a long term view look for potential, location and if, you can afford to, buy it as the past has proven that Prime Central London houses will always look after you