We offer an overview as to what’s happened in the property market this year, with a focus on Wimbledon
A demand for prime property is no longer just focused in on Chelsea, Kensington and other central London areas. Wimbledon has benefitted as demand has spread out to the leafy suburbs. Many buyers and renters choose Wimbledon if they are in search of more space. Wimbledon Common is on the doorstep, there are good schools in the vicinity, and Wimbledon dwellers will have more space in a less urban environment while being only 15 minutes away from London Waterloo by rail.
So what have we noticed? The main thing of note is that Brexit has not noticeably affected the property market in and around the Wimbledon area, but this may change once Article 50 is triggered and formal negotiations for withdrawal get underway. It was forecast before the referendum that a vote for Brexit would lead to a crash in property prices. Panic set in, and a number of deals were cancelled, but now prices are rising again. Most experts think the stamp duty change has had more impact than Brexit, and the same can be said of the local Wimbledon market.
How stamp duty increases have affected the Wimbledon market
Buyers who have left central London in search of relative value and green spaces have flocked to Wimbledon. Numbers have been helped by an increase in stamp duty land tax (introduced in 2014) on properties priced in excess of £937,500. However, these new rates have had less impact in an area like Wimbledon, where family homes usually cost in excess of £1million.
Demand has slowed in recent months due to the stamp duty increase, and this trend is mirrored in other prime property markets. If sellers have accounted for the increased stamp duty rates, then most transactions pass smoothly. Despite a slight change in the strength of demand because of stamp duty hikes, demand remains robust.
Brexit has created economic uncertainty and therefore trepidation in some buyers and sellers, but so far this means that vendors have to make sure their asking prices are realistic. However, demand remains strong and sales are positive.
In addition, in April the extra 3% stamp duty surcharge came into affect. This applies to purchases of second homes and buy-to-let investors. Stamp duty rates for commercial property have also changed.
Changes in the Wimbledon lettings and rental market
The stamp duty increase, introduced in April of this year, saw buy-to-let lending figures rise dramatically in the first quarter only to fall in April. Despite a slowdown in buy-to-let investment in the months after April, new figures released in October indicate the sector is showing signs of recovery.
Further changes include the mortgage interest relief for higher rate taxpayers which will be phased in from April 2017. From that point, the amount of relief available to landlords will be cut. By 2020, relief will only be available at the lowest tax rate.
We’ve reported more letting instructions, and the buy-to-let market remains buoyant. This has meant good supply in the rentals market, which in turn means more choice for tenants looking to rent in the area.