Those who plan to buy a house in London should expect to save £6,625 on the average price, as prices declined due to the uncertainty caused by Brexit.
Despite the cautious approach by some buyers, the increase in buy-to-let purchases still reflected the growing interest to invest in London properties. Landlords want to capitalize on the city’s rents that are the most expensive in Europe for expatriates, who should expect to pay an average of almost £5,200 for renting a three-bedroom home.
Finding the Right Property
While London’s residential real estate market remains a mixed bag for buyers and investors, there are some ways to be strategic with your next purchase. In Canary Wharf, property management companies can find the right property on your behalf. More landlords have used cash to buy real estate in London, based on a recent index.
Almost half of all buy-to-let purchases in the city involved cash during the previous year. The index listed this as the most significant share of the market since 2011. Before that, landlords usually bought a property through a mortgage. One factor for the increasing percentage of cash purchases could stem from a decline in average prices for homes not only in London but also in other parts of the U.K.
How London Became a Buyers’ Market
Asking prices for homes in Greater London fell by almost 4 per cent in the 12 months to March. The actual cost varies among different boroughs. For instance, average prices in Kensington and Chelsea declined the most at 8.3 per cent year-over-year to around £1.5 million. In Tower Hamlets, the price reduction reached only 6.1 per cent, but this led to a lower monetary value of around £554,000.
If you’re still undecided on where to buy, it’s essential to decide soon before the government discontinues a tax incentive for buy-to-let transactions among landlords. By next year, the tax benefit could be unavailable, and instead, buyers would be eligible for a 20 per cent tax relief from mortgage interest.
Less Competition for Buyers
Less competition from other buyers serves as another reason why now could be a good time to buy homes. You shouldn’t wait for the full impact of Brexit to unfold before taking action, since more people would finally be more confident about the economy and therefore revisit their plans for a home purchase.
Some experts also believe that Brexit shouldn’t be the main reason behind the weaker activity in spring when it’s usually teeming with buyers who compete for the same properties. As more people become cautious, now’s a good time to use it to your advantage and negotiate a better asking price.
If you’re still not keen on buying properties in London, the decline in real estate prices in the city caused the national average to increase by just £1,278. Whether you plan to purchase real estate for personal or investment purposes, you should consult a property management company before closing a deal. This will reduce the risk of owning real estate without a strong potential for price appreciation.