What Next (Part II)
In the last 15 years years the UK property market has suffered turbulence from the global financial crisis, Brexit and of course the Coronavirus 19 pandemic.
The first of these actually began on Wall Street, where certain banks had invested heavily in the US sub-prime property market. As has always been said, the US sneezes and the UK (and indeed rest of the world) catches a cold, which certainly was the case in the years following 2008.
Turning to Brexit, hindsight has shown that Brexit itself didn't destroy the UK property market (or specifically house prices) but the political uncertainty leading up to Brexit certainly did and the market had no sooner shrugged off the preceding global financial crisis when it stalled due to this Brexit uncertainty.
In late 2020 with that uncertainty out of the way, the property market started gradually strengthening but then in early along came Coronavirus. It was soon widely predicted that this would be very tough on the British economy and specifically the housing market. As history shows, the consensus view is often wide of the mark and last year was no exception. The first serious lockdown in spring 2020 caused huge pent-up demand which when combined with foreign travel restrictions put rocket fuel under the domestic property market, not just in Cornwall, but in most rural and coastal regions across the country.
Although not nearly as serious in their restrictions, the later lockdowns of November '20 and Jan/Feb '21 added yet more fuel to the fire. With foreign holidays still complicated buyers also became very motivated to buy a property near the coast prior to the summer break, with further urgency caused by relocating families leading up to the September return to school.
While there is always speculation and talk of a possible 'crash', at the moment it looks as if this activity has naturally slowed, as sellers can't find anything to move on to and the urgency prior to the summer holidays and new school year are now behind us. At the same time demand seems to be gradually returning to more normal levels, but the supply of new properties coming up for sale is still very tight, and could remain so through the winter.
So what's next for the rollercoaster? Well the above shows there will be shocks to the economy and housing market, of both a positive and negative nature. What we don't know is what they will be, when they will occur and whether they will cause a negative or positive effect. Huge sums are invested to be able to try to predict such events and the respective results, but the last two years alone shows we are actually none the wiser. Capital gains tax has been talked about, foreign travel may open up much more fully, the final stamp duty holiday ends tomorrow and there are UK fuel shortages - although I am reliably informed there are no real petrol/diesel shortages - just speculation by some in the mainstream media which has caused consumers to panic and top up their tanks sooner then they needed to - which has then created some local shortages.
We do know that over the long term the value of land and property has appreciated, so try to ignore the 'white noise' inthe short term and buy for the long term.