The first half of 2016 had more than enough going on to shape the property market. First of all, there was a marked rise in demand for property in Q1 thanks to the introduction of additional stamp duty charges coming into effect from April 2016. Landlords and investors looking to add to their portfolio were encouraged to buy homes before the close of March to save money.
This inevitably led to a fall in property sales in Q2 as savvy buyers had already concluded their property deals and plans for the year ahead. This fall then fed into the build-up to the EU Referendum vote and the uncertainty of that vote was always going to convince many people to hold off from buying property.
The falling pound impacted on the market as a while
In the immediate aftermath of the Brexit vote, the pound fell dramatically, reaching a three year low against the Euro in October of 2016. There was a further fall in January of 2017 as it was believed that comments made by PM May would lead to the UK leaving the single market. For the UK market as a whole, the fall in the value of the pound would lead to materials from abroad costing more and it made UK property more attractive to foreign investors. However, most of the interest in UK property from foreign investors occurs in London, so this is unlikely to impact the property market in mid Somerset.
Since the vote, the Bank of England has been proactive in supporting the economy. In August of 2016, it cut interest rates to 0.25% from 0.5%, which is clearly something that will impact on the property market and mortgages on the whole. However, the majority of landlords in mid Somerset, buy property without a mortgage, so this will not impact on these buyers. There is also a wide range of factors to consider in the offering of a mortgage to a person and there’s nothing to suggest that this change has had any impact on the mid Somerset property market.
The Somerset property market is robust enough to withstand external influence
While the full extent of Brexit on the UK property market (or the country as a whole) is yet to be determined, the fact that so many experts are now downplaying fears for the market is well worth considering. When it comes to Somerset, the nature of the market means that any impact that Brexit has would be diluted or minimised anyway. No matter what the economic impact on the country is, the key factor in the Somerset property market at the moment is that there aren’t enough homes. This is the case for people looking to buy their own home and it is the case for people looking to rent property.
This is the case across the country, so whether Brexit is able to have a big enough impact on demand for property is unlikely, but for the Somerset property market, 2017 looks set to be a year where more of the same occurs. This may not be the news that some people want to hear but with consistency on the horizon, this is positive news for most people in the local area.
