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Heaton & Partners’ newsWelcome to the sixth edition of the Heaton & Partners newsletter. 2016 is going to be an interesting
year when it comes to the property market, with a number of changes afoot, some of which we hope
to explain below.
A look at the marketIn our opinion, average UK property prices should remain broadly stable across 2016.
Prime central London prices may continue to drop off slightly, whilst in the country prices
are on the rise. However this outlook becomes unclear as the EU Referendum draws closer.
According to Knight Frank, prime central London property prices grew by only 0.1 per
cent in January, taking its annual increase to 1.2 per cent. However this is a changing
marketplace; Islington saw a growth of 7.7 per cent, whilst Knightsbridge actually saw
a fall in values of 6.4 per cent. This doesn’t mean that the prime central London market
is in trouble, rather that growth and depletion is occurring in a sustainable manner, as opposed to the vast
increases which were seen in previous years. In the country market, prices rose by 3.1 per cent in 2015, but
there have been a number of prime markets which have seen huge levels of growth to around 10.6 per cent
in areas such as Cheltenham, Oxford and Cambridge. At Heaton & Partners we have seen an increase in buyers
looking to leave London and invest in regional markets in search of more house for their money.
We would recommend buyers continue to look at the prime country house market as an option for safe
investment. Whilst stock remains low, some truly fantastic properties will become available in the next few
months and property still gives a better long term return on investment than any other asset class.
2 London Road, Newbury, RG14 1JX | +44 (0)1635 887340 | [email protected]
107 Walton Street, London, SW3 2HP | +44 (0)20 3675 3600 | [email protected] www.heatonpartners.com
April 2016
We would recommend buyers continue to look at the prime country house market as an option for safe investment
BrexitThis year’s EU Referendum on BREXIT is already dominating the headlines and we
expect the property market to slow down as we approach it, as it did with the General
Election in 2015. Online estate agent, eMoov, carried out an online survey on how
people believed BREXIT could affect the property market and whilst more than half of
Londoners believed leaving the EU would have a positive impact on their property’s
value, a number of people also believed it could have a negative effect, decreasing
European investment into our markets. Research by KPMG has found that BREXIT will
threaten the property market and may have a negative impact on cross-border investment, according to
66 per cent of property agents. And similarly, according to CoStar, 73 per cent of property investors believe
BREXIT will make the UK a less attractive market and lead to a direct fall in property values.
Whilst we may see a slight dip in activity in the run up to the Referendum, we believe that the UK will continue
to hold one of the strongest and most attractive property markets in the world.
Stamp dutyFrom this month, property buyers in England and Wales will have to pay an additional three per cent on each
stamp duty band for buy-to-let and second homes. As a result, we saw a number of purchasers completing
their deals before the end of March, including one client who completed just 17 days after they first instructed
us to find them a house, a new record for us from instruction to completion! It is possible we may now see
a slight dip in activity in the second homes market, however we don’t believe that this will be a significant
enough change to have an effect on pricing. Indeed, early indications suggest the country market is definitely
on the move.
2 London Road, Newbury, RG14 1JX | +44 (0)1635 887340 | [email protected]
107 Walton Street, London, SW3 2HP | +44 (0)20 3675 3600 | [email protected] www.heatonpartners.com
April 2016
We believe that the UK will continue to hold one of the strongest and most attractive property markets in the world
Super prime London and Home Counties There has been much talk in recent weeks about the ‘death’ of the super prime London and Home
Counties market and how this sector of the industry, which used to be seen as the mainstay
of international super rich investment, is now beginning to struggle. Let’s dispel some of these
myths. The reality is that there are a significant number of high value (over £20 million) homes
that whilst not on the open market are definitely available to buy. In a majority of cases, there
is a disconnect between vendors’ expectations who generally don’t have any actual need to
sell and buyers who are only willing to part with their cash on terms they perceive as sensible.
Simply, if you have a choice of five near identical properties, all not selling at £20m, why would you buy?
There are basically too many of these properties on the market which has contributed towards the slowdown
in transaction levels. Fewer international buyers actually parting with their cash is a more significant factor.
However, the bigger void is the modern developments with sky high prices, which once their initial gloss has
faded, will lose their appeal to super rich buyers.
Make no mistake, there are still buyers out there with very deep pockets who are buying the right houses. It’s
almost entirely international money and in many cases we suspect these purchasers are looking for a home to
park large sums of cash.
The super prime market will continue unabated. There may be some price corrections from time to time but
for the majority of people there is no better place to invest. Our advice is stick to the super prime areas and
traditional housing stock, then you can’t go wrong.
2 London Road, Newbury, RG14 1JX | +44 (0)1635 887340 | [email protected]
107 Walton Street, London, SW3 2HP | +44 (0)20 3675 3600 | [email protected] www.heatonpartners.com
Make no mistake there are still buyers out there with very deep pockets who are buying the right houses
April 2016
