Brexit What's Next for the Northampton Property Market

We’re a week on since the result was announced that the UK will be leaving the EU, with 58.3% of local Northampton voters voting to leave.

As most of the polls suggested a Remain Vote, it came as a surprise to me and probably most people but I’m sure a week on the reality will be setting in, so what’s next for the Northampton property market.

Well the Chancellor in the campaign suggested property prices would drop by 18%. Using Treasury estimates, their method of calculating was tenuous at best, but focused around the UK interest rates, which in turn would raise the cost of mortgages, and therefore lower the demand for property, causing a drop in property prices.…

I would say, yes that will probably happen.

Northampton Property Values will probably drop in the coming 12 to 18 months – but by 18% - I don’t think so!

I find that a little pessimistic and believe that figure was to get homeowners and landlords to vote in a particular way.

Since the previous In/Out EU Referendum which was in June 1975, property values in Northampton have risen by over 1700 percent, yes I did say over 1700 percent and whilst property prices did drop nationally by around 18 percent following the peak of 2007 and bottom of the market in 2009, If we compare property values today to the period before the financial crisis of the Credit Crunch 2008/2009 which was the worst global economic outlook since the 1930’s, they are still up over 10 percent.

But what about the interest rates, well since 2009, interest rates have been at 0.5% and lots of people have become accustomed to those sorts of levels.

So what happens about the interest rates

looking back over the years, interest rates in the mid to late 80's property boom were on average 9.25%, in the 90’s they were on average around 6.5% and in the uber-boom years when UK property values were rising by 20% a year for three or four straight years across the UK they were 4.5% and I’m sure many of you watching this will remember interest rates when they were at 15%!

But I suspect interest rates won’t rise because raising interest rates, causes deflation – which is the last thing the British economy needs at the moment and in yesterday's news there was an indication that they may even drop, but we'll have to wait for the up and coming assessments by the MPC (Monetary Policy Community) to find out.

So, what will happen next?

Well, there are many challenges ahead, but the country has spoken and we are now in unchartered territory but we have been through a couple of World Wars, an Oil Crisis, Black Monday, Black Wednesday, 15% interest rates and a Credit Crunch … and we’ve survived !

In the short term I think your Northampton property value may have a bit of a wobble… but in the long term – I think it’s as safe as houses!

That's it from me today, I'm Katherine bond from Northwood Northampton and if you want to see more videos about the Northampton Property market, please feel free to follow my YouTube Chanel.