By Cash buyers in London continue to exit the market, due to the uncertainties caused by Brexit, the current state of the economy and stringent taxation and regulation on property investment, according to a recent press release from the property management firm Apropos.
The number of cash buyers in the UK property market fell by 19.8 per cent between 2017 and 2018, with drastic declines recorded in the East of England, down 14.5 per cent. This was closely followed by the South East, which recorded a 14.3 per cent drop.
During the same period, average prices for cash sales in London dipped by 0.7 per cent, according to Apropos.
Cash buyers decline across the UK
Apropos recorded falls in the volume of cash buyers across the UK, with England dropping by 13.3 per cent, Wales down 6.6 per cent and Scotland falling by 2.9 per cent.
Major English regions also lost cash buyers too, with the South West down 12.9 per cent, the East Midlands falling by 12.5 per cent, Yorkshire down 12.1 per cent and the North East down 11.6 per cent. On top of this, the West Midlands and the North West saw decreases of 10.7 per cent and 10 per cent respectively.
This occurred at a time when mortgage volumes dropped across most of the UK, albeit by much smaller margins, according to Apropos.
Property investment viewed as a risk
David Alexander, joint managing director for Apropos, commented: “It is clear that cash buyers are viewing property investment as more of a risk, due to the uncertainties caused by Brexit, the direction of the economy and more stringent taxation and regulation on property investment. Cash investors have many options and these figures would indicate that property appears to be taking a back seat for the moment.”
Mr Alexander added: “London, as has been well documented, is undergoing a prolonged downturn in prices, so it is only natural that many investors will be put off property if values are to remain static for a year or two. There will almost certainly be better returns to be made elsewhere. An overheated market is rarely one which produces profit.”
Mr Alexander went on to say that, with so much political and economic uncertainty, especially due to Brexit, it is inevitable that investors will be wary of investing in property and other asset classes. However, more entrepreneurial individuals and organisations will use this as an opportunity to invest, he believes.
Mr Alexander concluded that there is no doubt that property remains a sound long-term investment and that the ebb and flow of the market is simply a natural response to uncertain times.
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