The British Public have decided, what next for the property market?
.. and now the vote has been made .. what next for the 16.78m British homeowners especially the 8.69m of those British homeowners with a mortgage?
British Property Values
The doom mongers were forecasting a fall in property values if we left, it is too early to say what will happen but I find this unlikely commented Andrew Oulsnam director of leading Estate Agents Robert Oulsnam and Company.
Since the last In/Out EU Referendum in June 1975,
property values in Britain have risen by 1750%
and whilst property prices did drop nationally in 2008 in the banking crisis .. they are still up 10.14% higher today.
In fact in 2013 the Government were worried about run away house prices only 5 years after price falls.
Mortgages remain plentiful and we still are not building enough houses each year meaning there is still a
fundamental shortage of residential property.
… and what of interest rates? Since 2009, interest rates have been at 0.5% and lots of people have become
accustomed to those sorts of levels. So what if interest rates rise .. end of the world? They are unusually low at present
But I suspect interest rates won’t rise that much anyway and could possible fall, as Mark Carney (Chief of the Bank Of England) knows, raising interest rates causes deflation – which is the last thing the British economy needs at the moment. In fact they have been printing money ( Quantitative Easing) for the last few years to the tune of £375bn a month. A bit of inflation because the pound has slipped on the money markets (not too much mind you) might be a good thing?
The British landlords of the 4.3m British buy to let properties have nothing to fear neither,
nor do the 10.11m tenants living in their properties.
Buy to let is a long term investment. I think there might even be some buy to let bargains in the coming months as some people, irrespective of evidence, panic. Even if we pull up the drawbridge at Dover and immigration stopped today, the British population will still increase at a rate that will exceed the current property building level. Britain is building 139,600 properties a year, but the country needs to build about 250,000 properties a year to even stand still, and as the birth rate is increasing, the population is living longer and just under a quarter of all UK households now are occupied by a single person demand is only going up whilst supply is stifled. Greater demand than supply equals higher prices. That is definitely a fact.
So, what will happen next?
Well, there are many challenges ahead. The country has spoken and we are now in unchartered territory – but we have seen much worse crisis’s in the past
And the value of British property? It may or may not have a short term wobble… but don’t panic because in the long term -it’s safe as houses anyway.