Supply and demand
The third quarter of this year provided a welcome dose of relative positivity compared to the considerable negativity following the EU referendum: buyers were much more active - the number of new buyers registering with Chestertons rose by 12% over the quarter - while the number of property sales increased by over 15%. Sellers also appeared more motivated, with the number of new instructions increasing by 7.5% compared to the previous quarter and the total number of properties available at the end of the quarter was consequently up by 5.4%.
This uptick in quarterly activity is very encouraging and indicates how quickly market sentiment can change. The market certainly seemed to have turned a corner and there was a greater willingness among both buyers and sellers to commit to deals as concern about the potential negative impact of Brexit reduced, at least in the shorter term.
The triggering of Article 50 by the end of next March – which will formally start the UK's exit procedure from the EU - is likely to create further turbulence and slow the market again – but it could also spur the market into a further increase in activity over the next six months if property investors and homeowners take a view that the country's economic prospects might take a turn for the worse.
The property tax hikes of the past 18 months continue to exert a drag on the market above £1.5m but sellers have started to realise that this is a situation that is unlikely to change and that sensible pricing is the best way to secure a sale. As a result, there has been a 15% increase in price reductions over the quarter.