The most recent set of data from the Land Registry has stated that
property values in Warrington and the surrounding area were 3.08% higher
than 12 months ago and 13.54% higher than January 2015.
Despite the uncertainty over Brexit as Warrington (and most of the
UK’s) property values continue their medium and long-term
upward trajectory. As economics is about supply and demand, the story
behind the Warrington property market can also be seen from those two sides of
the story.
SUPPLY
SUPPLY
Looking at the supply issues of the Warrington property
market, putting aside the short-term dearth of property on the market, one of the main reasons of this sustained house
price growth has been down to of the lack of building new homes.
The
draconian planning laws, that over the last 70 years (starting with The Town and Country
Planning Act 1947) has meant the amount of land built on in the UK today, only
stands at 1.8% (no, that’s not a typo – its one point eight percent) and
that is made up of 1.1% with residential property and 0.7% for commercial property. Now
I am not advocating building modern ugly carbuncles and high-rise flats in the
Cotswolds, nor blot the landscape with the building of massive out of place
ugly 1,000 home housing estates around the beautiful countryside of such
villages as High Legh, Lowton and Lymm.
The facts are, with the restrictions
on building homes for people to live in, because of these 70-year-old
restrictive planning regulations, homes that the youngsters of Warrington badly
need, aren’t being built. Adding fuel to that fire,
there has been a large dose of nimby-ism and landowners deliberately sitting on
land, which has kept land values high and from that keeps house prices high.
DEMAND
Looking at
the demand side of the equation, one might have thought property values would
drop because of Brexit and buyers uncertainty. However, certain commenters now
believe property values might rise because of Brexit. Many people are risk adverse, especially with their hard-earned savings.
The stock market is at an all-time high (ready to pop again?) and many people
don’t trust the money markets. The thing
about property is its tangible, bricks and mortar, you can touch it and you can
easily understand it.
The Brits have
historically put their faith in bricks and mortar, which they expect to rise in
value, in numerical terms, at least. Nationally,
the value of property has risen by 635.4% since 1984 whilst the stock market has risen by a very similar 593.1%.
However, the stock market has had a roller coaster of a ride to get to those
figures. For example, in the dot com bubble of the early 2000’s, the FTSE100
dropped 126.3% in two years and it dropped again by 44.6% in 9 months in 2007…
the worst drop Warrington saw in property values was just 20.94% in the 2008/9
credit crunch.
Despite the slowdown
in the rate of annual property value growth in Warrington to the current 3.08%,
from the heady days of 9.23% annual increases seen in mid 2014, it can be
argued the headline rate of Warrington property price inflation is holding up
well, especially with the squeeze on real incomes, new taxation rules for
landlords and the slight ambiguity around Brexit. With mortgage rates at an
all-time low and tumbling unemployment, all these factors are largely
continuing to help support property values in Warrington (and the UK).
You can always keep an eye on my blog for any properties I feel will make a good buy to let opportunity, or if you are after a second opinion then email me on manoj@hamletwarrington.co.uk or call on 01925 235338. If you are in the area, feel free to pop into the office – we are based on 6 Bankside, Crosfield St, WA1 1UP. There is plenty of free parking and the kettle is always on.
Don't forget to visit the links below to view back dated deals and Warrington Property News.
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