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Whats Happened in Property in 2016?

Written by Katie Cullen
Written by Katie Cullen
22nd December 2016 (Last updated on Monday 2nd October 2017)

2016 has been an interesting year for the property market; from Brexit to letting fees being struck off, it can be difficult to keep up with everything going on.

This week, have rounded up the main property news you need to know about from 2016.

1. Letting Fees Crackdown

Letting fees are meant to cover landlords' upfront costs, including inventory checks and credit referencing. However, the costs, which can add as much as much as £500 to the cost of renting, have long been considered disproportionate.

The abolition of letting fees means that four million households in England and Wales are hoping to benefit from this cut in costs. The ban has been a long-term aim of housing lobby groups such as Generation Rent and the charity, Shelter.

Are Rents Going to Rise?

Groups that represent landlords and letting agencies have stated that rents will rise as a result of the letting fee ban. They claim that agents will have no other option than to push the fees on to landlords, who in turn will then increase rents to cover the costs.

That said, letting fees have already been banned in Scotland, and has not resulted in increased rent.

2. Britain's Housing Market Lacking Supply

Britain's housing market is experiencing a record low level of homes for sale with stamp duty and uncertainty caused by the E.U referendum, putting off both buyers and sellers.

Although the Royal Institution of Chartered Surveyors (Rics) reported there was a small increase in the number of buyer inquiries in November, the supply of homes on the market has remained flat. It is the ninth consecutive month with no increase in the amount of new properties for sale.

Rics' survey found that a net balance of 14% expect house prices to increase over the next 3 months. In the next 12 months, a net balance of 40% expect house prices to rise across the country apart from London, where the outlook is negative.

Many property surveyors believe that stamp duty is the major factor causing the slump, hitting the most expensive part of the property market. Research by LCP found that only 15 homes worth more than £10 million were sold in London in the six months to October, down 75% from the same time last year.

Poor activity at the top end restricts activity at the lower end, meaning the Government needs to review the stamp duty levels.

3. The Housing Market After Brexit

The E.U referendum was and still is a major component of property news. A Guardian article from August 2016 has highlighted how it's impossible to predict the long-term effects of the E.U referendum on the housing market. However, so far, evidence shows that sales have slowed and prices have indeed fallen.

Using Zoopla's market data, the article found that in London, before the referendum there were 6,000 house sales in London per month, which then fell to 2,000 per month after it.

London hasn't even had the largest price falls after Brexit. In Devon, prices went down 3.1%, Cumbria 3%, Surrey, the Isle of Wight, Norfolk, Gloucestershire, West Sussex, Leicestershire, and Somerset all fell by 2.9%.

Across all of England, the total losses to those who bought homes in the nine months before the Brexit vote is at around £7,000 per household or buy-to-let landlord.

It's important to keep in mind that this data isn't a prediction for what is to come, but what has happened and to what extent it has happened.

The way the property market reacts depends on whether people believe the news, and estate agents. Rather than following predictions, the best course of action is to watch the house prices and how they change.

As shown by the news round-up, it's impossible to predict what is in store for the housing market. The letting fee ban should cut the additional hundreds of pounds they add to rent, but many landlord and letting agency representatives believe rents will actually rise due to landlords needing to cover the costs.

When it comes to house sales, there seems to be a slump many believe is due to the level of stamp duty. The months after Brexit have also indicated changes, but it's important to avoid predictions and look at the prices.

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