The hangover from the stamp duty reforms at the beginning of April has caused buy-to-let investors to pull out of the market, resulting in a huge 46% slump in the number of buyers. The looming referendum on the EU has created uncertainty in the market, compounding the fall in the level of demand.
It seems that the nation could be nearing the limit in terms of house price rises and in May we saw a slowdown, supporting those fears. In order to push sales levels back up, sellers need to be much more realistic in their asking prices – properties are currently in real danger of being over-valued and these homes will struggle to sell.
Although Brexit is causing uncertainty in the short term, regardless of the result of the referendum, there will always be an appetite to invest in the UK property market and it will therefore remain a global safe haven. In the longer term, this will simply be a slight blip in an otherwise powerful property market. In fact, we are still seeing a strong level of investment from Europe, despite the referendum.
In line with the rest of the market, demand from first-time buyers has fallen 45.1% in the last month alone. This demonstrates that the stamp duty surcharge for buy-to-let investors was not an immediate fix for helping first-time buyers to take their first step on the property ladder. However, we are seeing much less interest from buy-to-let investors and the reduced level of competition should help first-time buyers in the long run.