What should be one of the busiest times of the year for the property market, is currently proving frustrating for buyers and sellers alike here as a number of factors work together creating a situation where normal sense of urgency has been absent.
Football, uncertainty under Brexit and our amazingly good weather over the past two weeks have created a break in the usual busy levels of sale expected at this time of year. Ironically, bad weather has the same effect, but all these elements together have created a unique situation in spring 2016.
Having survived economic turbulence of the past ten years, confidence has now returned to the market and we can read the signs well enough by now to recognize a crisis when we see one, and have confidence that this isn’t one.
To put this into context, it’s worth comparing this lower level of activity at the moment to the stampede in the first quarter of this year to get completion before the end of the financial year, and crucially the introduction of the stamp duty increases, alongside new duty on second homes.
For our clients in the middle to upper end of the market (£500,000 to £3,000,000), many of whom have a second home, this means adding 3% on top of the already inflated stamp duty charges – a double whammy increase. There’s no doubt this has acted as a break in this sector of the market when committing to buying new property.
Homeowners in this bracket, many of whom run their own business, may have more reason to be concerned for the rest of 2016/2017 particularly regarding any further pause due to Brexit uncertainty, as bills and salaries still need to be paid no matter what, and will find it difficult to weather any further volatile period as they are only beginning to recover from the lost decade . If the vote is to remain in the EU, it will be business as usual for many. However it’s important to note that there will be just one week between the vote and the holiday exodus taking us to the second week in September before we can reasonably expect activity to start again in earnest.
The predicted lack of supply in the interim means the number of sale agreed properties will rise because the supply tap will be turned off. Available stock will decrease prompting many homeowners to hedge their bets until next Spring.
If the vote is in favour of leaving, the holiday season plus the current vacuum will prolong the lack of activity as vendors and purchasers wait to see what the implications are.
To add to the mix, Northern Ireland’s success in qualifying for the European championships means all eyes are on the ball for the next fortnight at least. It’s a perfect storm for the property market here, but one we should be able to weather with increased market assurance and economic stability. For the next few weeks, until the end of the tournament, the vote and the school year, all we can do is, as they say the NI training camp, Dare to Dream.