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We must stop blaming Brexit for slump in transactions, say London agents

An agent has said that the industry “must stop blaming Brexit for a decrease in transactions in prime central London”.

Charles Curran, principal at Maskells, said the 3% hike in Stamp Duty on purchases of second homes was the “fuel” for central London’s downturn; the Brexit vote had been the catalyst.

However, said Curran, the real trigger was a combination of buyer psychology and a fear of the unknown.

He said: “There is now a need for people to adjust their expectations and stop seeing their property as short-term investment.

“For example: based on a £2m flat with a Stamp Duty of £153,750, break-even point is five years.”

Curran said: “We have seen viewings continue to rise across all price points and are receiving serious offers, one property going to best bids in September and the remainder of offers, mostly 6% below asking prices, were all accepted.

“Rejected offers were between 7-15% of asking prices.

“Currently, we are witnessing a ‘testing of the waters’ from buyers making low initial offers, although we anticipate these being increased.

“Owners of properties who have not agreed to correct their asking prices over the past six months are missing out on this renewed market momentum.

“Buyers are mainly domestic or ex-pats buying in US dollars and taking advantage of the current weak pound. Stock levels are reasonable at present.”

Another London agent, Michael Wilson of Mountgrange Heritage, also said that the fall-out from the Brexit vote has “not been as dramatic as first thought”.

Wilson said that when the Leave vote was announced on June 24, “many of the deals we were working on were renegotiated or fell through”.

However, he says that the market started to normalise at the end of August.

The real problem, Wilson says, has not been the Brexit vote but Stamp Duty hikes at the top end of the market and for buy-to-let investors.

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