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 Penicuik 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 Penicuik area is £177,952, this means property values are set to drop for the average Penicuik property by £17,795… 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 Penicuik, the devil is always in the detail.
Look at the phrase again, and I have highlighted the relevant part “property values in Penicuik will be 10% lower than they would have been if we hadn’t voted to leave the EU”.
Property values today, according to the Registers of Scotland Land Registry are 8.21% higher than a year ago in Penicuik. The 12 months before that they rose by 4.37%. If we hadn’t voted to leave I believe, based on these figures, we could have safely assumed Penicuik 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 Penicuik, it’s just that house prices in a years time will be 2% lower than they are now (i.e. 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 Penicuik Borough Council area and Penicuik as a whole.
Average Value of a property 20 years ago £ 49,685
Average Value of a property 10 years ago £ 150,141
Average Value of a property 2 years ago £ 158,067
Average Value of a property 1 year ago £ 164,458
Average Value of a property today £ 177,952
Projected Value of a property in 12 months’ time £ 174,393
Therefore, I believe the average value of a Penicuik property will be £3,600 lower in 12 months’ time than today which is still well above the average value 12 months ago.
That’s not to say Penicuik property prices might not dip slightly on 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 Penicuik 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 Penicuik house prices have always bounced back.
Whilst the UK's vote for Brexit has created an uncertainty in the Penicuik 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 Penicuik landlords? They have recently been thrashed by Swinney’s and Osborne’s tax changes, but yields could rise if Penicuik 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 Penicuik landlords add to their portfolio, as rental demand for Penicuik property is expected to stay strong as more people find it more and more difficult to obtain mortgages.
To keep up-to-date with the rented property sector in Penicuik, visit my property blog by clicking here.
A few more interesting articles about the Penicuik property market:
- 18% of Penicuik Homes Are Three People Households http://bit.ly/2bl12X4
- Post Brexit property disaster - more like a ‘soft landing’ so far Nationwide claims
- It’s summer time .... and there are burglars about in Penicuik http://bit.ly/2bkzzAz
- A look at how the Private Rented Sector is performing, Summer 2016 http://bit.ly/2aCHqMw
- Penicuik’s population set to rise to 17,900 by 2036 http://bit.ly/2aT2qiS