A few weeks ago, I suggested property values in Wilmslow would be between 0.9% and 1.9% different by the end of the year. It might surprise some people that Brexit hasn’t had the effect on the Wilmslow property market that most feared at the start of 2018.
The basis of this point of view can clearly be seen in the number of property transactions (i.e. the number of property sold) that have taken place locally since 2008. The most recent property recession was the Credit Crunch years of 2008/2009/2010.
In property recessions, the headline most people look at is the average value of property. Yet, as most people that sell also go on to buy, for most home movers, if your property has gone down in value, the one you want to buy has also gone down in value so you are no better or worse off. If you are moving up market – which most people do when they move home – in a repressed market, the gap between what yours is worth and what you will buy gets lower … meaning you will be better off.
Yet, most property commentators, including myself, suggest a better measure of the health of the property market is the transaction numbers (i.e. the number of people selling and buying). So, I decided to look at the 2018 statistics, and compare them with the Credit Crunch years (2008 to 2010) and the boom years (2014 to 2017). The results can be seen in the table below.
|The Average Number of Properties Sold Per Month Over the Last 10 Years in Wilmslow and Cheshire East|
|2008 to 2010||2014 to 2017||2018|
The fundamental problems of the Wilmslow property market are that there haven’t been enough new homes being built since the 1980’s (and I don’t say that lightly with all the new homes sites dotted around the locality). Also, the cost of buying your first home remaining relatively high compared to wages and to add insult to injury, all those issues are reinforced by the tougher mortgage rules which were introduced in 2014 and the current mortgage market conditions. Assuming something can be sorted with Brexit, in the long term property values in Wilmslow will be constrained by earnings increases with long term house price rises of no more than 2.5% to 4% a year.
To end on, there is little to be lost in postponing a house purchase until there is better clarity on the situation. If it isn’t Brexit it will something else – so just get on with your lives and start living!