While Brexit has not yet had a sizeable impact
on the Warminster housing market, my analysis is pointing to the fact that the
economic viewpoint still remains uncertain and Warminster property price growth
is likely to be more subdued in 2017 - although that isn’t a bad thing so let
me explain.
Since the summer, apart from a little wobble
of uncertainty a few weeks after the Referendum vote, property values (and the
economy), on the whole has outperformed what most people were anticipating. In
fact, when I looked at the property prices for our Wiltshire Council area,
these were the results...
October 2016 -
rise of 0.51%
September 2016 -
rise of 1.28%
August 2016 -
rise of 1.2%
July 2016 -
rise of 1.57%
June 2016 -
rise of 0.4%
The UK property market continues to perform
robustly (because we can’t just look at Warminster as if in its own little
bubble) with annual price growth set to end this year at 6.91% and most South
West region property market at 7.18%.
Talking to fellow agents in London, the
significant tidal wave of growth seen from 2013 through to 2015 in the capital
has subdued over the last six months. However, as that central London house
price wave has started to ripple out, agents are starting to see stronger property
growth values in East Anglia and the South East regions outside of London, than
what is being seen within the M25. So, fellow Warminster landlords and
homeowners, is this the time to get your surfboards ready for the London wave?
Well, we in Warminster haven’t really been affected
by what is happening in the central London property mega bubble (i.e.
Kensington, Chelsea, Marylebone, Mayfair etc.). The property market locally is
more driven by sentiment, especially the ‘C’ word ... confidence. The main forces
for a weaker Warminster Property market relate to economic uncertainty
surrounding the Brexit process, which I believe will impact unhelpfully on
consumer confidence in the run up to and just after the serving of the Section
50 Notice by the end of Q1 2017.
In addition, the influence of reforms to the
taxation of landlords is expected to result in a reduced demand from buy to let
landlords, which will limit upward pressure on property values. However, on the
other side of the coin, demand from tenants has been strong, but this has been counterbalanced
by a strong supply of rental properties. In my opinion, there is a slight risk
of rents not growing as much in 2017 as they have in 2016, but by 2018 they
will rise again to counteract Philip Hammond’s changes to tenant fees.
The broader Warminster rental market looks
relatively positive with modest rental growth expected and rents might rise
further if landlords begin to sell properties in an effort to offset to the
impact of tax rises.
So what do I predict will happen to the Warminster housing
market in 2017? In Warminster, I believe property values are expected to rise
by 1.5% in 2017, compared to a rise of 7.18% this year, then picking up again
with a rise of 2.4% in 2018, 3.1% in 2019, 4.6% 2020 and 6.1% in 2021.
But these predictions do not take into account any effect of
a possible snap General Election or further referendum on ratifying any Brexit
deal (if that comes to pass in the future).
