While Brexit has not yet had a sizeable impact
on the Stamford housing market, my analysis is pointing to the fact that the
economic viewpoint still remains uncertain and Stamford property price growth
is likely to be more subdued in 2017 - although
that isn’t a bad thing, so let me explain.
Since last 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 South Kesteven District Council (SKDC) area, these were the results...
October 2016 -
drop of 1.05%
September 2016 -
drop of 0.25%
August 2016 -
rise of 1.06%
July 2016 -
rise of 2.47%
June 2016 -
rise of 1.68%
The UK property market continues to perform
robustly (because we can’t just look at Stamford as if in its own little
bubble) with annual price growth set to end this year at 6.91% and most of the East
Midlands region property market at 7.52%.
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 6 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 Stamford
landlords and homeowners, is this the time to get your surfboards ready for the
London wave?
Well, we in Stamford 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 and confidence. The main forces
for a weaker Stamford 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
(BTL) 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 Stamford 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 Stamford’s future housing
market? In Stamford, I believe property
values are expected to rise by 1.5% in 2017, compared to the 5.3% seen 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 my 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.
David
Crooke, owner & managing director
UPP
Property Agents, Sales & Lettings
Stamford
01780 484 554 and Rutland 01572 725 825
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