Is Now a Good Time to Buy?

We are now being informed on almost a daily basis by the BBC and media that the economy is in recession.
The property gurus are forecasting falling house prices on a UK basis for the remainder of this year and into 2021. Some Lenders are stress testing furloughed and self-employed buyers to much more severe standards and FTBs ( First Time Buyers) with small deposits are finding it more difficult to obtain a mortgage. The gurus in more recent times  have forecast that second home buyers and investors would be the ones benefiting most from the Stamp Duty holiday and they would cut FTB’s (First-Time Buyers) out of the market.( not the case).

However the good folk of Harrogate have set aside the opinions of the gurus and think it’s a great time to buy property and we are the busiest we’ve been in decades with record sales in July and so far in August.

So why are home buyers in Harrogate and district (and in some other parts of the country) so optimistic?

Well conventional wisdom cannot easily explain the high demand and strong prices locally.

It seems to us that the Property gurus have , quite simply , misread the situation because they see everything through the prism of the London property marketplace …. but we don’t . We have seen it all before in Harrogate – the last time in 2008 – when our market very successfully rode out the ferocious economic storms which played havoc in London & the South East.

It’s also clear to us that the iron rules of any property marketplace apply here in Harrogate. If demand is high and the supply is limited, then competition for good individual properties increases as do prices.

So what is going on?

It could be that the psychological effects of the lockdown added to the impact of the working from home revolution has been underestimated by the gurus. We cannot be certain yet if there has been an irreversible structural change in the way we all live and work , but the Covid crisis seems to have already played a sizable role in the medium term choices of a great many families.

We believe that our current housing boom is being driven in part by a great many Buyers bringing forward their plans to move by months or even years. The impetus to move soon for some Buyers has now become paramount. Who wants to be stuck in a small property with little or no garden and working from home 1 or 2 days a week or full time ? We think that Buyers know that in future a very sizable number of them will work from home for at least part of the week.

What is certain is that the savings on Stamp Duty holiday has encouraged a great many more Buyers into the market (and triggered some increase in house prices) although our market was flying even before the Stamp Duty holiday bonanza was announced.

It is possible of course that we are now “ in the eye of the storm “ and that we will in time run into some severe economic weather which will depress demand. The nationwide furlough scheme finishes at the end of October and the Stamp Duty holiday finishes at the end of March 2021.The ending of the Stamp Duty holiday creates a significant time limit for buying which will loom larger as the deadline approaches and so for some Buyers the desire to move quickly is a more pressing imperative than the possibility that they might buy at the top of the market and maybe before house prices level out or decline. These Buyers are also aware that interest rates are currently at record lows, and those with high levels of equity are practically being begged by the Lenders to take out a loan. It’s also true that there are a surprisingly large number of Buyers in very stable, Covid-proof jobs and for them it’s business as usual.

In summary – no one knows the extent of the long term damage done so far to the national economy. We don’t know how many business and jobs have been lost. We don’t even know if all the schools will open next month. What we do know is that here in Harrogate – in the heart of Yorkshire – we stand tall – ready to take on all the challenges which lie ahead to include those in the property marketplace. We believe in strong families and communities here and in the immutable long term value of the “ bricks and mortar“ in our homes.

If you wish to discuss the above or are interested in the Property market in Harrogate then please come along and see us and enjoy a free no obligation chat about the property services we provide in Residential Sales & Lettings.

Charles

Charles

About Charles

This blog follows the residential Sales and Lettings market in Harrogate, Knaresborough and surrounding villages.You will find information, analysis and guidance here along with news about Harrogate. I’m Charles Myring working in the Myrings Estate Agents Ltd business alongside my son Simon , daughter Gemma and dedicated sales teams. If you're thinking of Selling / Buying / Letting / Renting property locally Myrings would be happy to assist.