What a year 2016 has been! With government reforms to second home stamp duty, a shock Brexit, Donald Trump heading to the Whitehouse and then throw in Leicester City winning the Premiership and the BBC losing Bake Off (okay, latter event had less international impact), we have had an eventful 12 months! For those of us in the property market, whether we be estate agents, developers or providing development funding, there has been much to influence trading this year.
The Buy-to-let (BTL) market took a knock with the 3% stamp duty surcharge on second homes implemented in April. It was a rollercoaster ride though, with a ‘best-the-tax’ surge in property sales (some areas saw a 35% increase) immediately after the Chancellors announcement being followed by a slump once it came into force.
The London Central Portfolio report stated that in the six months following the Government’s introduction of the new additional Stamp Duty, compared with the same period last year, there has been a 36% reduction in sales between £2m and £5m and a 33% reduction in sales between £1m and £2m. Interestingly, they go on to quote that in total, “the reduction in sales activity above £1m in the last six months alone, may have resulted in a loss to the Exchequer of nearly £0.5bn.”
The looming Brexit vote in June lead to uncertainty in the market both before and after the event with varying reports of buyers withdrawing from their purchases promptly afterwards. However, some confidence returned quickly to the housing market after the initial shock accordingly to the Royal Institution of Chartered Surveyors (RICS) Residential Market Survey, which is seen as a key indicator of housing market activity.
Recently the RICS report for November, showed a small increase in new buyer enquiries for the third consecutive month, with near term expectations pointing to a continued, albeit relatively modest, rise in activity over the months to come.
As we now approach the end of the year Rightmove reports strong November sales outweighing uncertainty and demand up in all regions, except London, by 9% in 2016 compared with 5.2% in 2015. A buoyant November indicates upwards price pressure going into next year, though tempered by ongoing uncertainty and increasingly stretched buyer affordability. Rightmove goes on to forecast an overall 2% house price increase in 2017.
According to Miles Shipside, Rightmove director and housing market analyst: “For the housing market the uncertain outlook has meant a head and heart tug of war between ‘stay put’ and ‘carry on moving’. After a pause the mass-market seems to have opted firmly for the latter in most parts of the country. As we come to the end of the year these figures showing high levels of sales agreed and dwindling numbers of homes for sale give a far greater level of reassurance about the outlook for 2017 than was previously available.”
This year development funding opportunities for Saxon Trust (previously Calmez) have been as varied in type as they have been geographically. From a truly stunning maisonette apartment in Cornwall with direct harbour frontage to 13 affordable houses in Stockport; 22 luxury seaside apartments in Kent to a delightful development of three exclusive houses in the West Midlands; these are a sample of the wide range of development funding completed this year.
We look forward to seeing what 2017 will bring and yet more exciting development funding opportunities. Merry Christmas and a Happy New Year from all at Saxon Trust!