A Yorkshire estate agent is urging homeowners not to be panicked into rash action in light of recent headlines which have claimed the UK property market is on the brink of another crash.
The Halifax’s latest index showed a 0.8 per cent drop in the value of homes sold in April – the first time a fall in house prices has been recorded for quite some time.
Some of the tabloid media have since predicted a difficult time for sellers, with some reported to be already “slashing asking prices” to make a sale.
However, in his latest blog (http://www.esaleuk.com/crisis-what-crisis/) Esaleuk.com MD David Rook says there have been unusual elements at play in the market over the past six months and he doesn’t believe there is any evidence yet of a risk of a long-term decline in property values.
He said: “First of all, that slight drop was only recorded in April. If the figures for the first quarter of 2016 are compared with 2015, then we have still seen a 9 per cent rise in property prices which – let’s face it – is hardly disastrous.
“Secondly, a dip in prices was actually predicted by many last November when the Chancellor announced a 3per cent surcharge in Stamp Duty on second homes purchased after April 1 this year. The result was a rush by landlords to complete buy-to-let deals before the deadline, leading to a surge in sales ahead of the date and, inevitably, a small decline afterwards.
“Thirdly, with uncertainty over Britain’s role in the EU, there are reports to suggest buyers are hanging fire, even though there are some great mortgage deals out there at the moment. Nevertheless, some are worried about the impact change will have on their jobs or their income so – at least until the Brexit vote in June – it’s quite likely there will be fewer buyers around, which may persuade some keen to move quickly to drop their asking price to make their property more attractive.
“None of these are likely to be long-term trends. None – other than perhaps a rise in interest rates – are likely to have a far-reaching impact on how much we’re prepared to pay for a property.”
Mr Rook said, if sellers are influenced by media reports and join others already reported to have reduced asking prices substantially, the risk of a downward spiral increases and the newspaper headlines are likely to become a self-fulfilling prophecy.
He added: “Our advice would be not to panic. Things could look very different by July 1 and, even if the downward trend continues for a while, a few months of falling house prices doesn’t represent a crash.
“Secondly, don’t be further bamboozled by the introduction of a new house price index in June, which may once again lead to an illusion that prices are falling. In fact, any fall is likely to be the result of different metrics which will simply nullify the way exceptionally high-priced properties can skew the figures.
“Thirdly, if you’re still worried, just give us a call. We’d be more than happy to have a chat about the market in your area or even offer a free online valuation, even if it is just to put your mind at rest.”