8
Jul
Business as usual for the property market
So what has changed? Well…not a great
deal.....
Yes it’s hard not to buy into the constant bombardment of
negativity from the media for consumer sentiment and whatever may
or may not happen a new beginning for the UK is around the corner.
During this transition many positive opportunities are just as
likely to occur, it is far from a glance into the abyss which
followed the 2008 financial crisis.
A pause for breath in the property market is just as much to do
with the longer-term surge in house prices to record levels in
recent years, as it is of any "Leaving the European Union "
effects.
Since 2012 house price growth has been purely founded upon
demand outstripping supply and we do not foresee that this will
change.
Yes the vote to leave and subsequent resignation of the Prime
Minister has obviously caused a initial amount of uncertainty,
whilst a few movers may delay their decisions until things die down
a bit, any fall in buyers is likely be matched by a fall in
sellers, which may soften the market for a short period, but by no
means is the ground going to fall out beneath us.
In fact, the mortgage market is looking rosy. Following the
carnage of 2008, banks now have a requirement to hold much more
capital to maintain their liquidity. The Bank of England is likely
to relax those requirements slightly and in addition may reduce the
base rate further should the need arise. Consider also that the
cost to banks for funding fixed rate deals is also falling so the
availability of ‘cheap’ money is very likely to
continue and hence encourage further investment and interest in the
property market.
Modest price falls in London were already manifesting themselves
following a hike in stamp duty for second homes and investment
properties, back in April of this year. Prior to this London prices
had seen enormous surges in an upwards direction only in recent
years and needed to level out. In North Essex we record more than
35% of our transactions from buyers from London. Critically the
fear was that foreign investment would leave the capital which may
prove to be the case short-term, but our associated agents in and
around London have already seen a surge in enquiries from Chinese
and Indian investors with Sterling being at a 31 year low.
Despite the current doom & gloom as portrayed in the media,
we are yet to deal with any renegotiation of prices on agreed
transactions or any aborted sales attributed to "Brexit
fears".
In the first week following the result, visitors to our own website
"EssexCountryHomes.com" did fall by 30% - however these browsing
figures have since recovered. This we put down to all the other
exiting news going on such as the Football and Wimbledon!
We continue to see mortgage offers issued as usual without any
quibble on value or price. We continue to have buyers registering
with us who have already sold and others who have been looking for
many months.
What we must remember is that we live in a well connected and
beautiful area which attracts many retirees and commuters from more
affluent areas down the A12 corridor due to the house price
differential. There is no suggestion that this will change.
If you are planning your move for the long-term, any short-term
price movements whatever they may be, will be largely irrelevant.
Taking a common sense approach by having a large deposit and not
over extending yourself is good advice no matter what the market is
like.
Circumstances will always drive people’s desire to move.
Our growing population, the availability of lending and the chronic
housing shortage will continue to provide the under-lying stability
to the housing market.
House price growth is expected to moderate, but ultimately
unless you are entering or leaving the market everything is
relative.
Darryl Stanley & Tracy Churchwood