If you’re anything like me then your Linkedin, Facebook
and Twitter feeds have no doubt been full of Brexit news, stories, anger or
petition requests to get the vote re-counted and if I’m honest I’ve tried to
avoid it for the last 24 hours as there is a lot of negativity going
around. Of course in my usual
conversations with the lovely local people of Falkirk there have been a number
of questions about house prices and whether I expect to see a drop and whether
investors should hold off buying property at the moment.
Two weeks after Brexit, I guess there are a couple of
ways to look at this……
If you decide not to buy as a result of the referendum
and property prices drop then in the short term you will have certainly won.
Your money will still be in the bank earning you no interest but at least you
won’t have lost anything.
If you are brave and decide to buy that investment
property anyway and the market drops 5-10% you would no doubt be a bit miffed
and think it was probably a bad decision.
Let’s say that property cost you £100,000 then you could be looking at a
loss of £5,000-£10,000.
With the above in mind, I was trying to consider whether
I would advise putting a hold on your next purchase ‘just in case.’
We don’t know what the effect of Brexit will be on the
local market yet. We don’t know how long it will take to trigger Article 50
and, once it is triggered, we don’t know how long it might take to sort all of
the issues out but we do know there will always be a strong demand for rental
property in Falkirk.
If you are worried about house prices in Falkirk then it
might be worth considering this…..
2006 to today ....
In 2006, the average value of a Falkirk property was just
£116,493 back then and broken down by type it was: Detached £194,034;
Semi-detached £108,935; Terraced £80,077; Flat £75,245.
The average value of a Falkirk property today is £139,335
and broken down by type it was: Detached £232,157; Semi-detached £133,398;
Terraced £98,488; Flat £84,981.
This means in the last 10 years the average value of a Falkirk
property has increased by 19.61% which breaks down by type of property as
follows: Detached 19.65%; Semi-detached 22.46%; Terraced 22.99%; Flat 12.94%.
Going back further ....
Go back 20 years and you find that
the average value of a Falkirk property was £38,093 which broke down by type as
follows: Detached £77,275; Semi-detached £32,575; Terraced £26,788; Flat £28,422.
So over the past 20 years a Peniciuik property’s average
value has increased by 265.97% - the spread by type of property is greater:
Detached 200.43%; Semi-detached 309.51%; Terraced 267.66%; Flat 199.00%.
Property is for the long term ....
We often talk about property investment being a long
term thing and if you’re in it for the long term and can weather the storms
then you will probably do alright. I have bought my properties fairly
consistently over the last 20 years, I have been through many property booms
and traumas and guess what……
I’ve done alright out of it! If prices drop 10%, I will
still have done alright out of it.
Now don’t get me wrong. I’ll be a little upset if they
do drop 10% but my personal opinion is they won’t.
If over the next 10-20 years (which is what I would call
holding a property long term) we experience anywhere near the same kind of
growth a small blip will not make a huge difference.
At the moment people are being cautious and this could
present itself as an opportunity for anyone looking to buy a property in Falkirk
as fewer people will be jumping in with both feet.
I’m not suggesting you rush out to buy a property but
fortune favours the brave and either way in 10-20 years’ time you will probably
have done alright!
Don't agree with me; let me know
I’m sure there will be plenty of people that disagree
with me. I’d love to hear from you whichever side of the fence you sit on so
please do give me a call (01324 469840), send me an email (news@thekeyplace.co.uk) or pop into the office (6 Vicar
Street, Falkirk) and I’ll be happy to discuss this or anything else property
related.
A few more interesting articles about the
Falkirk property market:
- Post EU referendum – will history repeat itself in the Falkirk property market? http://bit.ly/2922wPP
- Scotland votes remain, UK votes leave – what now for the 41,307 Falkirk landlords and homeowners? http://bit.ly/28WO3Wt
- Values of Falkirk Terraced Houses smash through the £125/sq ft barrier http://bit.ly/28NYRc9
- Win win for Falkirk landlords – capital growth AND rental yields are higher than in Linlithgow and Edinburgh! http://bit.ly/1VZaON2
- 26% of Falkirk Tenants’ Salary goes on Rent http://bit.ly/25LoBwJ
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