Stoke-on-Trent property values are unexpectedly 6.6% higher
than at the end of 2017, notwithstanding the uncertainty and threats over the
potential impact of Brexit in 2019. This has exceeded all the predictions (aka
guesses) of all the City of London economists, in an astonishing sign of
strength for the local Stoke-on-Trent and wider national economy.
Nevertheless, the statistics from the Land Registry come
after a lethargic year for the number of properties in Stoke-on-Trent
compared to the actual prices achieved for those properties. All this against a framework of amplified
political ambiguity and ensuing years of rising Stoke-on-Trent property
values that have reduced the affordability of homes in the locality.
The average value of a Stoke-on-Trent property today
currently stands at £153,600
I believe locally, Stoke-on-Trent property value growth will
be more reserved in 2019 after two decades of weaker wage rises. One of main
drivers in the demand (and thus the price people are prepared to pay for a
home) is the growth of peoples wage packets. Interestingly, wage inflation over
the last six months has risen from 2.4% in the late summer to its current level
of 3.3% (which is higher than the average since the Millennium, which has been
a modest 2.1%). One of the reasons why wages are growing in the short term is the
unemployment rate in the country currently only stands at 4.1%, continuing to
stay close to its lowest level since the 1970’s.
However, even though Stoke-on-Trent salaries and wages are
rising comparatively higher than they were last year, looking over the long
term, Stoke-on-Trent property values are 179.56% higher than they were in
January 2002, yet average salaries are only 76.1% higher over the same time frame.
This means over the last few years, with average property values so high comparative
to salary/wages, many Stoke-on-Trent potential buyers have been priced out of
being able to purchase their first home.
At first glance, these stats are actually rather positive during
this reported time of political uncertainty and the height of Brexit commotion
... because I genuinely believe that to be the case. The press have always
looked for the bad news (well they do say it is that that sells newspapers),
and whilst I am not entering into the pros and cons of Brexit itself, the
numbers do stack up quite well since the Brexit vote took place nearly 3 years
ago.
Moving forward, when taken with the recent reduction in short
to medium term number of property transactions (i.e. the number of Stoke-on-Trent
properties sold), it should be noted that a lot of the this buoyant house price
increase has a lot more to do with a shortage of properties on the market
rather than an uplift in the Stoke-on-Trent housing market generally.
And we can’t forget that Stoke-on-Trent isn’t in its own
little bubble, as there are noteworthy differences across the UK in property
value inflation. House prices in London and the South East have hardly risen or
even fallen in some places, whilst in the Midlands, North and other parts of
the country they have generally increased.
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