Published: 01/06/2016 Last Updated: 09/02/2017 14:16:09
We hope you are enjoying the rare glimpses of sun we seem to be experiencing at the moment, while, perhaps, you debate which box to tick on 23rd June.
It's interesting how the whole Brexit vote is casting an increasingly large, rather dark shadow over everything at the moment. It is obviously very difficult to extrapolate fully the effects of an Out vote on the London property market (or even an In one), and more specifically the Lettings market. Even if we do vote Out it's difficult to know the time frame and process of what happens next and if we vote In by a narrow margin will that lead to significant fissures in the economy; and what will the effect be on Europe itself with the rise of the more extreme political elements? And then, if we get through all this we might have President Trump by the end of the year to really shake the world up - phew!
Anyway, bringing things back to right now, things are pretty slow and it would seem logical that this is driven by Brexit. Sales prices do seem to be softening, particularly in the market above a £1m - and more so as you go up. This has, however, been a segment of the market under duress since George Osborne altered the Stamp Duty rates back in late 2014. What is less clear are the effects on the Lettings market. This seems to be slow too but blaming this on Brexit seems a bit too simplistic. Brexit may be effecting the level of demand by reducing various companies' staffing requirements, for example, but we are sceptical this explains the whole situation. Our own belief is that the Lettings market is slowing because; there is a lot of new stock coming on to the market, particularly new build stock of one and two bedroom flats and; tenants are renewing in larger numbers as they are unwilling/unable to pay higher rental costs - and the extra stock means they don't have to.
So does this mean the sales and lettings markets are poor places to be? Not necessarily. The London property market reflects so many different factors, both nationally and internationally, that it is generally shortsighted to bet against it. We are still seeing demand from the Far East, where an enormous amount of wealth is being created and where the rising middle class feel nervous about keeping all their money in the region (particularly China). Property in areas like Hong Kong and Singapore is still more expensive by and large, than London and with the fall of the value of the Pound relative to many other currencies this also adds to the fact that London property is looking cheaper to foreign investors than it has done in quite a while, despite changes to the tax regime.
In terms of rentals, it is probably likely that prices will remain soft for a while but really, as above, we believe that it is unlikely that investors and companies will bet against London in the medium to long term and that In or Out, London will still be a key city to be located.
A couple of weeks ago we acquired the business of a good local agent in Shoreditch called PJ Morgan. The rationale behind this deal was that the owner was looking to sell and felt our company matched the same ethos as his own - i.e. an independent lettings and management business giving good quality, personal service to landlords and tenants alike. We would like to take this opportunity to welcome those new landlords as clients and hope that we can foster the same longstanding relations we have with our existing client base.
We have recently started using a new 'PropTech' application called Fixflo which has proved to be very helpful in the management of issues of your properties. This application allows tenants to log-on to our website, report an issue, giving specifics about the issue and then be notified that the problem has been received and is being dealt with within a specific time frame. This is useful in terms of dealing with the issue effectively, managing the tenant's expectations and also, because the law now prevents landlords being able to issue a tenant with notice if there are unresolved, outstanding maintenance issues, this technology provides a time line and documentary evidence of what happened and when. Please click on the link below where you can see how this works: https://pgestates.fixflo.com/Auth/HomeIssueCreate
Finally, we at PG Estates would like to take this opportunity to say good-bye and massive thanks to Jane Allen who is retiring at the end of the month. Jane has been working with us in the Islington office for four years and has worked for a number of agents on Upper Street for over 20 years. She has brought enormous experience and a calm demeanor to her role and we will miss her. She does, however, leave the team in a far stronger position than when she joined us so we thank her for her efforts in developing the business and we wish her all the best for her future.