Whilst chatting with a local landlord a few weeks ago,
I suggested property values in Warrington would be between 1.5% and 2.3% different by the
end of the year. It might surprise some people that Brexit hasn’t had the
effect on the Warrington property market that most feared at the start of 2018.
The basis of this point of view can clearly be seen in
the number of property transactions (i.e. the
number of property sold) that have taken place locally since 2008. The most
recent property recession was the Credit Crunch years of 2008/2009/2010.
In property recessions, the headline most people look
at is the average value of property. Yet, as most people that sell also go on
to buy, for most home movers, if your property has gone down in value, the one
you want to buy has also gone down in value so you are no better or worse off.
If you are moving up market - which most people do when they move home - in a
repressed market, the gap between what yours is worth and what you will buy
gets lower ... meaning you will be better off.
Yet, most property commentators, including myself,
suggest (and I have mentioned this before in some of my other blog articles) a
better measure of the health of the property market is the transaction numbers
(i.e. the number of people selling and
buying). So, I decided to look at the 2018 statistics, and compare them
with the Credit Crunch years (2008 to 2010) and the boom years (2014 to 2017). The
results can be seen in the table below.
Then, I looked at the average quarterly figures for
those chosen date ranges ... and created this graph ...
In that 2008 to 2010 property Credit Crunch recession,
the average number of properties sold in the Warrington area was 185 per month.
Interesting when we compare that to the boom years of 2014 to 2017, when an
average of 284 properties changed hands monthly … yet in the ‘supposed’ doom
laden year of 2018, an impressive average of 242 properties changed hands
monthly … meaning 2018 compared to the boom years of 2014 to 2017 saw a drop of
14.8% - yet still 30.6% higher than the Credit Crunch years of 2008 to 2010.
The simple fact is the fundamental problems of the Warrington
property market are that there haven’t been enough new homes being built since
the 1980’s (and I don’t say that lightly with all the new homes sites dotted
around the locality). Also, the cost of buying your first home remaining
relatively high compared to wages and to add insult to injury, all those issues
are armor-plated by the tougher mortgage rules which were introduced in 2014
and the current mortgage market conditions.
It is these issues which will ultimately determine and
form the rather unexciting, yet still vital, long term outlook for the Warrington
(and national) housing market, as I feel the Brexit issue over the last few
years has been the ‘current passing diversion’ for us to worry about. Assuming
something can be sorted with Brexit, in the long term property values in Warrington
will be constrained by earnings increases with long term house price rises of
no more than 2.5% to 4% a year.
Fundamentally, the question I am asked by many Warrington buy to let landlords
and Warrington homebuyers is ... “should I wait to buy or not?”
As a Warrington homebuyer, one shouldn’t be thinking
of what is happening in Westminster, Brussels, Irish Backstop, China or Trump and
more of your own personal circumstances. Do you want to move to get your child
in ‘that’ school or do you need an extra bedroom for your third child? For lots
of people, the response is a resounding yes - and in fact, I feel many people
have held back, so once we know what is finally happening with Brexit and the
future of it, there could a be a release of that pent-up demand to move home as
people humbly just want to get on with their lives.
There is little to be lost in postponing a house purchase
until there is better clarity on the situation. If it isn’t Brexit it will
something else - so just get on with your lives and start living. We got
through the global financial crisis/Credit Crunch in ‘08/’09, Black Wednesday
in ’92 where mortgage interest rates went from 8.5% to 15% in one day, we got
through the worst stock market crash with Black Monday in ’87, hyperinflation,
power shortages, petrol quadrupling in price in less than a year and a 3 day
week in the ‘70’s … need I go on?
Warrington Landlords? Well, where else are you going
to invest your money? Like I said earlier in the article, we aren’t building
enough homes to keep up with demand ... so as demand outstrips supply, house
values will continue to grow. Putting the money in the building society will
only get you 1% to 2% if you are lucky. In the short term though, there could
be some bargains to be had from shortsighted panicking sellers and in the long
term ... well, the same reasons I gave to homeowners also apply to you.
Email me on manoj@hamletwarrington.co.uk or call on 01925 235 338 – we are based on the Warrington Business Park, Long Lane, WA2 8TX. 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.
CLICK HERE TO FIND OUT HOW MUCH YOUR WARRINGTON HOME IS WORTH FOR FREE
Hamlet Homes Warrington, your local Estate Agent
Follow my Warrington Property Market Blog
Hamlet Homes Warrington LinkedIn Page
Hamlet Homes Estate Agents Warrington Facebook Page
Hamlet Homes Estate Agents Warrington Twitter Page
No comments:
Post a Comment