How has Brexit affected the property market in East London E14?

It's now been nearly three months since Britain voted to leave the EU, a result that shocked the world and even many of those campaigning for Brexit.

Since the historic referendum in June any number of politicians, academics, business leaders, economists, celebrities and world leaders have been offering their opinion on the result.

Naysayers point to the dramatic fall in the pound after the Brexit vote, increased economic uncertainty, business fears and unhealthy question marks over access to the single market and free movement of people.

The uncertainty for farmers, the fisheries industry, the science and tech sector and universities – all of which rely on subsidies from the EU and the easy movement of goods, people and services – hasn't been adequately addressed, critics say.

What's more, they say Brexit hasn't even happened yet, and the longer Theresa May and her government stall the more harm they potentially do to international relations and potential trade deals. On the other hand, many are of the opinion that the 'apocalyptic wasteland' predicted by figures in the Remain campaign hasn't come to pass.

In the immediate aftermath of the vote the economic turmoil was there for all to see, but the pound soon recovered, the stock markets didn't crash and another global financial crisis was comfortably averted. George Osborne's emergency budget wasn't needed, the country didn't fall back into recession and some of the more dire warnings from the Bank of England and other key bodies didn't come true.

How has the property market reacted?

After the initial shock, everything has calmed down and people are simply getting on with things. There is still a background of political turmoil and uncertainty – and it won't be clear exactly how things will play out until Article 50 is triggered and the official withdrawal from the EU begins – but many are taking the business as usual approach.

Not least the property market, which has knocked aside any uncertainty or political turmoil and carried on much the same as before. House prices have remained broadly steady – some data has shown they have dropped slightly, some has shown them increasing, some has shown barely any change.

But talk of a dramatic property crash, the sort seen in the aftermath of the global financial crisis, has quickly been quashed. The property market has remained resolute and stable.

Those with mortgages – and those looking to acquire mortgages – will also have been cheered by the Bank of England's recent decision to cut interest rates to record lows of 0.25%.

This was done to stimulate the economy post-Brexit and protect house prices. It means that mortgage rates are the cheapest they've been for a very long time, attracting more first-time buyers and second-steppers to the market.

Lending is cheap and buyers, who might have been putting off deals in the lead-up to the referendum, now feel confident enough to take decisive action. Demand for homes is still very high, and still massively outstripping supply, which means that house prices are set to continue to rise for the foreseeable future.

The buy-to-let sector

Buy-to-let investors, after coming to terms with the raft of new legislation brought in by George Osborne towards the end of his tenure as Chancellor, are also starting to return to the market now the referendum vote has passed and the market is more settled again.

They are also being helped by low mortgage rates on buy-to-let mortgages and high tenant demand.

Furthermore, foreign investors have sought to take advantage of favourable exchange rates and market conditions to buy up property in major UK cities.

Prime Central London

Not all parts of the property market, however, are thriving. The Prime Central London market has been struggling for a while now, with research pointing to price falls and declines in the number of transactions.

Uncertainty over the EU referendum, the slowdown after the introduction of the stamp duty surcharge and the long-term impact of stamp duty changes to high-value properties have all been cited as possible factors in the troubles of Prime Central London.

For the last 18 months or so, prices have been falling in the ￡2 million to ￡5 million market, while the sub-￡2 million market has proved more resilient but has also seen prices drop in each quarter since Q1 2015.

This, however, has been to the benefit of property in the ￡800,000 to ￡950,000 bracket, with high net worth investors seeking out cheaper deals with lower levels of stamp duty.

Looking ahead

As always, there are a wide range of opinions on how the market is currently performing – with each piece of research and house price index saying something slightly different – but all have been broadly consistent.

There has been no drastic fall in house prices, the property market hasn't crumbled and the fundamentals remain the same – while demand continues to outstrip supply, things will stay largely as they are.

The East London market, as always, has stayed strong and resilient in the face of outside pressures. Demand for homes and rental accommodation in this part of the capital is still huge.

East London holds significant appeal for first-time buyers, buy-to-let landlords and overseas investors alike thanks its combination of good transport links, varied property and a thriving leisure and culture scene.

At Rubicon Estates we will do all we can to help get your home sold or let for the best possible price.

We are based in Limehouse, East London, and were the first estate agency to be established in this part of E14.

For more information about what we do, please contact us on: 0207 987 8887.

If you would like to find out how much your property could be worth or how much you could be making in rent, check our free and instant sales and lettings valuation tools.

Written By Holly O'Brien - Regional Marketing Manager