Even the most sane
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 Dartford 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 Dartford Borough Council area is £270,900, this
means property values are set to drop for the average Dartford property by £27,090
… 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 Dartford ..
the devil is always in the detail
Look at the phrase
again, and I have highlighted the relevant part “Property values in Dartford
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 13.93% higher than a year ago in the Dartford
Borough Council area. The 12 months before that they rose by 13.02% and the 12
months before that, they rose by 11.91%. If we hadn’t voted to leave, I believe
on these figures, we could have safely assumed Dartford House prices would have
been 13% higher by the Summer of 2017.
… and that’s the
point, we won’t see a house price crash in Dartford, it’s just that house
prices in a years time will only be 3% higher than they are now (ie 13% 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 Dartford Borough Council area and Dartford as a whole.
Average Value of a
property 20 years ago £ 58,300
Average Value of a
property 10 years ago £184,300
Average Value of a
property 2 years ago £210,400
Average Value of a
property 1 year ago £237,800
Average Value of a
property today £270,900
Projected Value of
a property in 12 months’ time £279,000
Therefore, I believe the
average value of a Dartford property will be £8,100 higher in 12 months’ time
than today.
That’s not to say Dartford
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 Dartford 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 Dartford house prices have always bounced back.
Whilst the UK's vote for Brexit has created
an uncertainty in the Dartford 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 Dartford landlords? They have
recently been thrashed by Osborne’s tax changes, but yields could rise if Dartford
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 Dartford landlords add to
their portfolio, as rental demand for Dartford property is expected to stay
strong as more people find it more and more difficult to obtain mortgages.
