House prices in the UK may well weaken in the coming months as the ramifications of the Brexit vote in the referendum are digested, but the prior warnings of a massive crash in property prices across the country now seem very far-fetched.
Even if there was a slowdown in the property marketplace it is highly likely that this would be short-lived. It seems much more sensible to us to believe that prices of property in the UK will keep on rising, albeit at a slower more sustainable pace. The fundamental reason is really quite simple.
There are more people who want to buy than those who want to sell.
Many commentators in fact think that the Governments own housing policies are set to do more damage to the housing market this year than the Brexit vote. The recent 3% increase in SDLT (Stamp Duty Land Tax) on properties purchased by BTL (Buy to Let) Landlords and the removal of tax breaks for higher-earners may yet force prices to stall for small and medium-sized family homes.
The upside to any overall slowdown or slight dip in house prices however could help the younger generation of FTBs (First Time Buyers), who are still finding it very difficult to get onto the housing ladder. A great many are obliged to turn to their parents or grandparents to help them with deposits to get a first home.
Interest Rates
Interest rates have been at 0.5% since 2009 and everyone has become accustomed to this low level.
If interest rates should rise, and right now there are some indications that they could even fall, would it be the end of the world ?
Interest rates in the 1986/88 property boom were on average 9.25%.
In the 1990’s they were on average around 6.5% and in the bonanza years of the 2000’s were 4.5%.
We suspect interest rates won’t rise very much at all, and nowhere near the level of earlier times.
A Harrogate Perspective
First of all is interesting to note that the good folk of Harrogate voted to remain in the EU. The 50.97 % remain vote verses 49.03 % leave result in the town in a very high turnout (78.84 %), was close but the fact is that the three metropolis in the golden triangle; Harrogate, Leeds and York, all voted to remain within the EU.
This vote is opposite to the other electoral districts of Yorkshire and may reflect the prosperity and European/International trading profile of our region.
Property prices and demand in Harrogate remain very strong and have never significantly weakened in any of the downturns of the past 30 years. We are fortunate to live in a happy oasis of stability as far as the Sales and Lettings of property is concerned.
Certainly as far as our business in Residential Sales & Lettings is concerned the Brexit vote has not torpedoed any of our ongoing transactions. Exchanges and Completions are proceeding smoothly along with the usual high level of new market appraisals and instructions.
Our advice to Sellers and Buyers in Harrogate – Stay Calm
Even in a worst case type scenario for the town and property prices weaken, then for the majority of Sellers we are only talking about a paper loss. If a seller sells and buys in the town/ locally, the price of the house being sold is compensated for in the price of the house being purchased.
It’s actually better than that for any seller who plans to move up-market as relatively speaking the more expensive property, edging down at the same market rate , is that much cheaper.
Summary
The property market in Harrogate in both Sales and Lettings is very confident & robust, should there be any weakening then, based on lots of experience, it will be temporary with a strong bounce back.
And the value of your Harrogate property today ?
In our view , even if there were to be short term price wobble ( which we doubt) , in the longer term the value of your home is secure – its “ as safe as houses “.
