Even
the sanest 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 Stamford 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 South Kesteven District Council area is £181,000,
this means property values are set to drop for the average Stamford property by
£18,100. But, before we all go into
panic mode, remember the devil is always in the detail.
Look
at the phrase again, and I have highlighted the relevant part “Property values
in Stamford 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 6.81% higher than a year ago
in the South Kesteven District Council area. The 12 months before that they
rose by 3.14%, and the 12 months before that, they rose by 6.28%. If we hadn’t voted to leave, I believe using
these figures, we could have safely assumed Stamford House prices would have
been 5% higher by summer 2017.
And,
that’s the point. We won’t see a house
price crash in Stamford, it’s just that house prices in a year’s time will be 5%
lower than they are now (i.e. 5% 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 South Kesteven District Council
area and Stamford as a whole.
Average
Value of a property 20 years ago £
47,800
Average
Value of a property 10 years ago £157,800
Average
Value of a property 2 years ago £164,300
Average
Value of a property 1 year ago £169,500
Average
Value of a property today £189,000
Projected
Value of a property in 12 months’ time £171,950
Therefore, I believe
the average value of a Stamford property will be £9,050 lower in 12 months’
time than today.
Whilst the UK's vote for Brexit has created an
uncertainty in the 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.
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