Even the most sane person in
Britain has to admit the Brexit vote will, in one shape or another, affect the
UK Property market. Excluding central London which is another world, most
commentators are saying prices will be affected by around 10%. So looking at
the commentators’ thoughts in more detail, property values in Warminster will
be 10% lower than they would have been if we hadn’t voted to leave the EU.
As the average value of a
property in the Wiltshire Council area is £251,700, this means property values
are set to drop for the average Warminster property by £25,170 … batten down
the hatches .. soup kitchens and mega recession here we come ..it’s going to
get rough.
..
but before we all go into panic mode in Warminster .. the devil is always in
the detail
Look at the phrase again, and
I have highlighted the relevant part “Property values in Warminster will be 10%
lower than they would have been if we hadn’t voted to leave the EU”
Property values today,
according to the Land Registry are 11.5% higher than a year ago in the Wiltshire
Council area. The 12 months before that they rose by 6.13% and the 12 months
before that, they rose by 1.49%. If we hadn’t voted to leave, I believe on
these figures, we could have safely assumed Warminster House prices would have
been 9% higher by the Summer of 2017.
… and that’s the point, we
won’t see a house price crash in Warminster, it’s just that house prices in a
years time will be 1% lower than they are now (ie 9% less the 10% lower figure because of Brexit). Let’s look at
the historic figures and how that compares to today’s figures for the Wiltshire
Council area and Warminster as a whole.
Average Value of a property
20 years ago £ 63,000
Average Value of a property
10 years ago £198,200
Average Value of a property 2
years ago £212,700
Average Value of a property 1
year ago £225,800
Average Value of a property
today £251,700
Projected Value of a property
in 12 months’ time £249,200
Therefore, the figures show the
average value of a Warminster property will be £2,500 lower in 12 months’ time
than today. I actually believe prices will plateau over the next 12 months and
we will go through a period of consolidation.
That’s not to say Warminster
property prices might not dip slightly in the run up to Christmas (in fact they
always have done just about every year since the year 2000 and most of those
were boom years) .. but in 12 months time this is my considered opinion of
where Warminster property values will be.. and looking at the historic prices,
even if I (and many other property market commentators) are wrong and they drop
10% from TODAY’S figure .. in the whole scheme of things, we have been through
a Credit Crunch, Black Monday and 15% interest rates over the last 20 to 30 years
.. and still Warminster house prices have always bounced back.
Whilst the UK's vote for Brexit
has created an uncertainty in the Warminster housing market, there is no need
to panic and prospective buyers should merely use common sense about their
purchases. I always say to people to be prudent and if you are taking out a
mortgage, at some stage during the life of that mortgage, circumstances will be
difficult. We won’t have a 2008 Credit crunch fire sale of properties because after the Mortgage Market Review which took
place in the Spring of 2013, mortgage borrowers are not as highly leveraged
this time around. As a result of this, with any luck there will not be
too many distressed sales, which cause widespread price reductions.
.. and Warminster
landlords? They have recently been thrashed by Osborne’s tax changes, but yields
could rise if Warminster house prices fall/stablise and rents grow, and this
might also make it easier to obtain mortgages, as the income would cover more
of the interest cost. If prices were to level or come down that could help Warminster
landlords add to their portfolio, as rental demand for Warminster property is
expected to stay strong as more people find it more and more difficult to
obtain mortgages.
