Looking at the newspapers between Christmas and New Year,
it seemed that this year’s sport in the column inches was to predict the future
of the British housing market. So to go along with that these are my thoughts
on the Stoke-on-Trent property market.With the average 5-year fixed rate mortgage at 1.98% (down from
3.47% in 2014) and 2-year fixed rate at 1.47% (down from 2.37% in 2014),
mortgage interest rates offered by lenders are at an all-time low (even with
the slight increase on the Bank of England base rate a few months ago). Added
to this, there has been a low unemployment rate of 5.7% in Stoke-on-Trent, which
has contributed to maintain a decent level demand for property in Stoke-on-Trent
in 2017 (interestingly – an impressive 4,759
Stoke-on-Trent properties were sold in last 12 months), whilst finally, the
number of properties for sale in the city has remained limited, thus providing
support for Stoke-on-Trent house prices, meaning …
Stoke-on-Trent Property Values are 0.9% higher than a year
ago
However, moving into 2018, there will be greater pressures on people’s
incomes as inflation starts to eat into real wage packet growth, which will wield
a snowballing strain on consumer confidence. Interestingly though, information
from the website Rightmove suggested over a third of property it had on its
books in October and November had their asking prices reduced,
the highest percentage of asking price reductions in the same time frame, over five
years. Still, a lot of that could have been house-sellers being overly
optimistic with their initial pricing.
In terms of what will happen to Stoke-on-Trent property
values in the next 12 months, a lot will be contingent
on the type of Brexit we have and the impact on the whole of the UK economy. A
lot of people will talk about the Central London property market in the coming
year, and if the banking and finance sectors are negatively affected with a
poor Brexit deal, then the London market is likely to see more of an impact.
Nevertheless, the bottom line is Stoke-on-Trent homeowners and Stoke-on-Trent
landlords should be aware of what happens in the rollercoaster housing market
of Central London, but not panic if prices do drop suddenly there in 2018. Over
the last 8 years, the Central London property market has been in a world of its
own (Central London house prices have grown by 89.6% in those last 8 years,
whilst in Stoke-on-Trent, they have only risen by 13.1%). So we might see a
heavy correction in the Capital, whilst more locally, something a little more
subdued.
Hindsight is always better than foresight and predicting
anything economic is all well and good when you know what is around the corner.
At least we have the Brexit divorce settlement sorted and, as the UK economy
and the UK housing market are intertwined, it all depends on how we deal as a Country
with the Brexit issue. However, we have been through the global financial crisis
reasonably intact ... I am sure we can get through this together as well?
Oh, and house prices in Stoke-on-Trent over the next 12 months?
I believe they will end up between 0.5% lower and 1.1% higher, although it will
probably be a bumpy ride to get to those sorts of figures.
If
you would like to read more articles on my thoughts on the Stoke-on-Trent
property Market – please visit the Stoke-on-Trent Property Market Blog
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