William Croker, Bournemouth property expert and Director of Knights Estate Agents discusses the impact of Brexit an the local housing market.
Brexit, the great national divide! How can one referendum, facilitated by a government so confident of winning it misread the mood of a little over half of the nation, have thrown the cards up into the air in such a seismic way?
Lets be honest, when David Cameron announced the referendum as part of his election manifesto, most commentators believed it to be a foregone conclusion, a tick in the box of a smooth passage to power. What has happened subsequently has seen us exit the EU, unsure of what comes next. It has seen the demise of Cameron and Osborne, the likely replacement of Corbyn, as leader of the opposition. It has seen fresh calls for a second referendum on independence north of the border and it has seen the pound struggle against almost all global currencies.
I wasn’t for leaving, if I am honest. However, we have and now is the time to look forward with positivity and assess the situation, here and now and not with a whimsical retrospective approach to recent history.
So what do we know about the Bournemouth housing market and the global influences that may affect you and your home or investments?
Well firstly there is not enough houses for sale to satisfy demand. Of course pricing as ever is key, but should your agent price the property accurately then you will agree a sale within a four week period on average. One word of caution, because agents don’t have enough stock, beware the valuation that sounds to good to be true. It usually is!
Secondly interest rates are still incredibly low, and if Britain follows the U.S lead, we may well be dropping them again. This can only help mortgage holders with affordability and encourage market dynamism. This is also likely to be consistent for at least two years. What it also means is that savings earn less, leveraging increases in Buy-To-Let investments as savers seek greater returns. Yes the stamp duty levy has changed in this market but the savings made in monthly payments will quickly cover any short term losses.
Thirdly the FTSE 100, crashed but has recovered astonishingly quickly as the graph below shows. This has bred confidence in the market and whilst the pound is still down against the dollar there are signs of life with the Pound recording its best week against the dollar in terms of rises for seven years. Sterling is also recovering nicely against the euro, with a third of the drop having been recovered already and this is likely to continue as The Netherlands and Italy consider their futures in the EU.
Finally we have the ‘Bournemouth Effect’. Bournemouth has, over the last few years become an aspirational destination for many. With a large non-transient population and an increase in demand based upon lifestyle and improvements in infrastructure.
Allied to this is the growth of the University, which has seen thousands of students come to the town and a great percentage staying locally after their studies finish.
Lastly business’ are relocating to the area with enormous multi billion pound companies moving their head offices her. Curtis Wright for instance are an operation with a 3 billion pound European turnover in everything from aircraft parts to electric wheel chairs. They have just relocated nearly 500 staff to their new purpose built head quarters on the Aviation Park.
The country is in a state of flux, for sure. But Bournemouth whilst not bomb proof has many reasons to be positive. There will not be an ostrich reaction within the housing market because in short, supply and demand dictates there cant be, lending money has never been cheaper and is about to get even less expensive and regional boosts ensure free movement to the area.
So please feel aggrieved or delighted in equal measure at the result, depending upon your persuasion, but if you have concerns of the Bournemouth housing market then don’t, it will be fine. In fact if you are looking to sell now is a great time due to the lack of competition across the board. The perceived Brexit slowdown and annual summer holiday lull, has promoted a situation where I believe September will be a bumper month, especially if interest rates dip. So grab the reins and take control, this is not a drama and the crisis, is proving to be a speed bump in the history books.