London has been in the grip of a basement boom. Backed by high demand in the property market and the want for more space in a city where it is in short supply, basements have become the latest must have. However, with the UK voting in favour of Brexit, what does this mean for basement building in London?
Much has happened since the 24th June when the result was announced; a new government is now in place and what will happen in the long term is anyone’s guess. However, a short term picture is starting to emerge.
A drop in house prices is beginning to happen and in the upper end of the market, stagnation is likely. Faisal Durrani, head of research at property firm Cluttons, told The Guardian that: “the prime central London market had been slowing for more than a year, but had been ‘amplified’ by the referendum result.”
The number of homes changing hands is expected to slump this summer. A survey by the Royal Institution of Chartered Surveyors (RICS) found that new buyer enquiries declined ‘significantly’ during the month of July. However, demand was already beginning to fall even before the Brexit vote due to higher levels of Stamp Duty and stricter mortgage criteria.
Currently, the economic outlook is not looking as bleak as some had feared. However, uncertainty is causing some experts to predict that the economy will shrink in the third quarter.
These economic headwinds could mean that the trend to ‘improve not move’ could gain further momentum, as moving will look even less appealing.
The basement building industry has not just been affected by Brexit; stricter planning guidelines, especially in the central London boroughs such as Kensington and Chelsea, has led to a slow down. However, there has been a rise in applications from the outer boroughs such as Windsor.
Rob Wood, owner of Simply Basement says: “to date the impact of Brexit on our business has been minimal. We’ve had quite a few clients delay decisions by a couple of weeks since the referendum result, but are now deciding to move forward as there doesn’t appear to be any short-term financial risk.”
Wood is no stranger to economic headwinds. He began his business in 2008, the start of the Great Recession, with his wife Helen Wood. However, this did not stop them winning work.
“It was the fall in house prices in 2008 and 2009 that saw the trend for improving not moving,” said Wood. “In unstable times people look for certainty and offering fixed prices helps clients to feel reassured. What homeowners don’t want is any surprises. ”
Want to improve and not move? Create the space you need with fixed priced, fully project managed basements from Simply. For more information or to arrange a site visit contact us on 0800 917 7571 or click here to fill out a free site survey form.Share this: