8 Jul

Business as usual for the property market

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

 

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