Post Brexit - York Property Prices set to drop £23,500 in the next 12 months?
Even the sanest person in Britain has to admit the Brexit vote will, in one shape or another, affect the UK Property market. Excluding central London which is another world, most commentators are saying prices will be affected by around 10%. So looking at the commentators’ thoughts in more detail, property values in York will be 10% lower than they would have been if we hadn’t voted to leave the EU.
As the average value of a property in the York City Council area is £234,800, this means property values are set to drop for the average York property by £23,480 … batten down the hatches .. soup kitchens and mega recession here we come ..it’s going to get rough.
.. but before we all go into panic mode in York .. the devil is always in the detail
Look at the phrase again, and I have highlighted the relevant part “Property values in York will be 10% lower than they would have been if we hadn’t voted to leave the EU”
Property values today, according to the Land Registry are 8.15% higher than a year ago in the York City Council area. The 12 months before that they rose by 8.02% and the 12 months before that, they rose by 8.1%. If we hadn’t voted to leave, I believe on these figures, we could have safely assumed York House prices would have been 8% higher by the summer of 2017.
… and that’s the point, we won’t see a house price crash in York, it’s just that house prices in a years time will be 4% lower than they are now (ie 8% less the 10% lower figure because of Brexit). Let’s look at the historic figures and how that compares to today’s figures for the York City Council area and York as a whole.
Therefore, I believe the average value of a York property will be £4,700 lower in 12 months’ time than today.
That’s not to say York property prices might not dip slightly in the run up to Christmas (in fact they always have done just about every year since the year 2000 and most of those were boom years) .. but in 12 months time this is my considered opinion of where York property values will be.. and looking at the historic prices, even if I (and many other property market commentators) are wrong and they drop 10% from TODAY’S figure .. in the whole scheme of things, we have been through a Credit Crunch, Black Monday and 15% interest rates over the last 20 to 30 years .. and still York house prices have always bounced back.
Whilst the UK's vote for Brexit has created an uncertainty in the York housing market, there is no need to panic and prospective buyers should merely use common sense about their purchases. I always say to people to be prudent and if you are taking out a mortgage, at some stage during the life of that mortgage, circumstances will be difficult. We won’t have a 2008 Credit crunch fire sale of properties because after the Mortgage Market Review which took place in the Spring of 2013, mortgage borrowers are not as highly leveraged this time around. As a result of this, with any luck there will not be too many distressed sales, which cause widespread price reductions.
.. and York landlords? They have recently been thrashed by Osborne’s tax changes, but yields could rise if York house prices fall/stablise and rents grow, and this might also make it easier to obtain mortgages, as the income would cover more of the interest cost. If prices were to level or come down that could help York landlords add to their portfolio, as rental demand for York property is expected to stay strong as more people find it more and more difficult to obtain mortgages.
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