For investors who have recently bought into the London residential market and for those now considering a purchase, the latest trade deal is very good news.
Property prices have held firm this year and buoyed by Rishi Sunak’s stamp duty incentive, have remained strong in the last quarter.
Factors investors need now to consider are as follows:
Currency
£ Sterling has averaged US$1.70 from 1990 – 2015. Brexit and then the coronavirus impact has made the currency drop to an average of US$1.30 over the past four “Brexit” years.
Just prior to the trade deal being announced the pound dropped from US$1.33 to US$132 by mid-December. Now with the deal announced the currency has come back to the 1.36 mark.
The news of a trade deal is now boosting both currency and UK markets as a whole and it is anticipated that we will see a gradual strengthening of the £ Sterling throughout 2021.
Stability
The bad news over the past four years has been endless as we all know.
With Brexit now decisively finalised, with the new trade deal announced, new vaccines in the pipeline and a continued residential stock shortage, the market is poised to move upwards steadily throughout 2021 and thereafter.
We are about to enter a period of stability after four years of uncertainly. This is very good news for investors who should now be on the lookout for residential purchase opportunities in London. The best route forward will be on off-plan projects where a small amount of capital down-payment can now secure property for delivery in one to two years’ time.
Availability of stock
Again, the four years of uncertainty over Brexit is now over. Stock shortages of residential have collapsed during this period because projects have been put on hold and developers have slowed production of new stock.
It is anticipated that buying in the New Year is likely to be strong. Rishi Sunak will inevitably extend the stamp duty holiday and the government are determined to accelerate planning applications. With newfound confidence developers will be pushing into new projects, but availability of stock will shrink in the short term, pushing up prices.
Now is the time to get out there and look at the opportunities available. The window for buying will be the 1stand 2nd quarter of 2021. Expect prices to move up quickly after that.
London has one of the world's top performing investment property markets which is forecast to continue its growth for the foreseeable future.
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