The past 15-17 months has been an interesting time in the Walsall property market without question. I can only speak for myself but many of my fellow professionals, clients and associates will attest to the feeling of being on a rollercoaster ride.
With 213,120 UK house buyers and 58,580 UK tenants moving home in September, the time has been manic for many people. This means that some Walsall homeowners are asking if they should be staying put? Or, should they wait for the best home to come onto the market before putting their home up for sale or find a buyer but be unable to find a property – it’s all rather confusing.
Then we have some Walsall landlords who are asking themselves if they should buy another property investment and some even wondering if they should sell and cash in on the boom.
Finally, with 95% mortgages back, first-time buyers are asking if they should look to take the plunge and buy their first home or wait.
In this article, I hope I can help you with the decisions you might want to make and to navigate this unusual post lockdown housing market. Let me start with some stats to show you what is happening at the moment in Walsall.
Walsall house prices rose by 2.7% last month, according to the Land Registry. This means the annual rate of house price growth in Walsall has increased from 3.9% last year to 19.8% this year. That is a whopping increase of 15.9%!!
Looking at the national figures, many people were concerned the UK property market was overheating as spring saw annual growth of 9.9%, the highest rate of house price growth documented since June 2007 when national house prices were rising by 10.8% p.a.
It was only a matter of a few months later the Credit Crunch hit, and the average value of a UK home plummeted from £190,032 to £154,452 in 18 months, a drop of 18.7%.
Government economic measures such as the Furlough Scheme and the Stamp Duty Holiday have so far shielded the Walsall property market from the worst economic recession since 1709.
So, the question is, can this growth in Walsall house prices continue, or is this the start of a house price crash?
Just before lockdown there were around 400 ‘5% deposit mortgage’ deals and first-time buyers were able to shop around to get the best deal. When the first lockdown hit, 5% deposit mortgages disappeared, meaning that as many Walsall would-be first-time buyers were about to buy their first Walsall home in 2020, the rug was pulled from under their feet.
Today, you can count on two hands the number of mortgage deals which allow a 5% deposit. Even worse, the number of hoops one has to jump through to get a 5% deposit mortgage is very high. On top of that, you have to pay handsomely for the privilege, with mortgage rates of at least 3.95%.
In putting down a 5% deposit, you borrow the remaining 95% as a mortgage. These 95% loan to value (LTV) mortgages were very popular with Walsall first-time buyers before the Credit Crunch.
The property sector has been one of the highlights of the COVID-19 story so far. After a shutdown of the industry in the first lockdown, the Government gave the go ahead for estate agents Walsall and lettings agents Walsall to continue to work, meaning that people could still move.
The slight easing of restrictions coupled with the Stamp Duty Holiday gave our industry – and the economy – a real boost and according to the Office for National Statistics, UK average house prices “increased by 7.6% over the year to November 2020”, the highest growth rate since 2016.
We and other estate agents across the country have reported increased demand, and a strong appetite from both buyers and sellers to get moving.
And keep moving you can, but there are definite rules to be followed.
So, what can take place?
Keeping a Blog updated is a full-time job and when you have other full-time commitments, something has to give! So, like a lot of my readers and followers of the Blog, I must prioritise my workload. Serving my clients is paramount and comes first therefore, you may have noticed I have not been on the blog much recently. When I do get a chance, I try and give you a bit of a read instead of my usual word count. In recent weeks I have had several conversations with Walsall Landlords and Walsall Property owners all asking me the same question time and again if, the Walsall property market will crash in 2021...??
..in the last few months, the Walsall (and UK) property market has resisted and defied every economist’s prediction. With the economy a shadow of its former self, unemployment set to hit 11.9%, the Government on track to borrow nearly half a trillion pounds to pay for Coronavirus support packages etc., all of this has had no effect on Walsall homeowner’s enthusiasm or capability to want to move home. It highlights the influence of both the emotional impact of lockdown and the enticing appeal of saving thousands of pounds on your Stamp Duty Tax bill.