Thanet Property Insights:Ignoring the Doom Monger Headlines
Navigating the property landscape, particularly in an area like Thanet, requires more than just a reactive approach to the daily newspaper and social media headlines.
As homeowners and potential investors are continuously bombarded with alarming whispers of plummeting house prices, coupled with rising interest rates and the heartache of negative equity, there's a tangible atmosphere of anxiety and trepidation. Yet, the truth we must all embrace is this:
No one can predict the property market with pinpoint accuracy,not even the experts.
Every press release from the Halifax, Nationwide or Land Registry with the merest hint of a downturn or hiccup in the property market becomes headline fodder, often stoking fears and uncertainty. Why do the newspapers and clickbait doom mongers post that?
Because ‘bad news’ sells newspapers!
With interest rates on an upward trajectory, both prospective and current Thanet homeowners are grappling with pressing questions …
WIll the house price decline continue? Is negative equity on the horizon? What of interest rates? Let us dive in on the current state of play.
Thanet house prices are only 1.6% lower than their peak of January 2023.
(£320,475 January 2023 to £315,384 June 2023 – the most up-to-date data from the Land Registry).
Interesting when compared with a national drop of 1.9% over the same time frame, with most areas seeing house prices rise in the last two months!
Historically, property prices have exhibited a rhythmic dance of peaks and troughs. A review of housing market trends over decades would reveal this inherent cyclical nature. House price declines are only a prelude to eventual rebounds. This pattern has been the underpinning of the property market for generations.
What of negative equity?
If Thanet house prices drop by 10%, a small percentage of homeowners (2.83% of all homeowners that have bought in the last two years) will be in negative equity.
Yet, that is only a problem if they decide to sell the property, and as we all know, homeownership is a long-term thing, and most of those who would have negative equity will probably be on five-year fixed low-rate mortgages.
But what if Thanet house prices dropped from the peak in January 2023 by the same percentage (20.2%) as they did in the global financial crash in 2008/9?
If that were the case, Thanet house prices would just return to the Land Registry house price levels achieved in December 2020 (£253,292) – and nobody was complaining about those! (Although the number of people in negative equity would increase slightly).
As Thanet homeowners face uncertainty regarding potential house price drops, it is crucial to recognise the various factors that support the housing market’s resilience. While economic conditions can fluctuate, history has shown that housing values tend to appreciate over the long term.
Thanet homeowners can also take comfort in the differences between the 2023 market and the 2008 housing bubble, including stronger equity positions and a more regulated lending environment.
So what does the future hold for Thanet homeowners?
For homeowners in Thanet, it's crucial to understand the broader context. Global economic dynamics, national policies, regional developments, and local demand-supply dynamics all play pivotal roles in determining property prices.
As such, while short-term market shifts are inevitable, they don't necessarily define the long-term trajectory of property values.
Moreover, property should often be viewed as a long-term investment.
While the temptation to make quick decisions based on current trends is strong, it's vital to consider the bigger picture. Remember that property isn't just an asset; for many, it's a home, a place of memories, and a cornerstone of family life
The mortgage interest rates of 1% to 1.5%, that we saw up to 18 months ago, are not going to return. Yet looking at 5-year swap rates, the money markets are predicting (with billions and billions of pounds of their own money at stake) that UK interest rates will come down significantly over the next 5 years from their current levels of around early 6%.
There is a saying in property - “Marry the house, and date the interest rate”.
It simply means you are committing to a long-term relationship with the house you love. Yet you can dump the interest rate when you re-mortgage. The idea is that when you find the house you love, you buy it, with the anticipation that you will be able to refinance later when interest rates drop.
Diving into the archives of property history, one witnesses a tale as old as time: a fluctuating market characterised by peaks and troughs. Like the ever-rolling waves of the sea, property prices rise, fall, and rise again.
Such is the cyclical nature of housing markets worldwide, and Thanet is no exception.
For the residents and homeowners of Thanet, understanding the broader tapestry of property dynamics is paramount. Consider these vital elements:
- Global and Local Economic Factors: Thanet's property market, though unique, doesn't exist in a vacuum. International economic shifts, national fiscal policies, regional developments, and even local events play decisive roles in shaping property prices. A short-term dip, as mentioned above, does not foretell a long-term decline or house prices crashes as seen in 2008.
- The Long Game: Traditionally, owning property is a marathon, not a sprint. Quick, impulsive decisions, driven by panic or greed, rarely bear fruit. Instead, a more measured, patient approach, considering the property's long-term potential, is often more rewarding.
- Thanet's Rich Tapestry: With its historical charm, coupled with an array of property types ranging from vintage homes to contemporary modern brand-new homes, Thanet offers resilience against sweeping market downturns. This diversity provides both stability and opportunity.
- Infrastructure & Growth: Thanet's ongoing development and infrastructural projects often lead to a long-term appreciation of property values, countering short-term market fluctuations.
- Rental Prospects: A potential silver lining during market downturns is the rental market. Thanet's strategic location, history, and vibrant community make it a perennial attraction for renters. For Thanet homeowners, this can translate to a steady income stream even if the sales market looks less favourable.
- Historic Resilience: A glance at Thanet's past reveals a property market that has not only weathered numerous economic challenges but often emerged stronger and more robust. This resilience speaks volumes about its inherent potential.
In weaving through the property labyrinth, homeowners and investors in Thanet must cultivate a panoramic view. While it's easy to get swayed by the market's immediate waves, one must remember the vast seas and ocean beyond. The short-lived troughs are merely precursors to the next crest.
To truly succeed in Thanet's property domain, it's less about reacting to today's noise and more about tuning into the timeless melodies of history, patience, and informed foresight.
If would like a chat about where you sit in the Thanet property market, do not hesitate to give me a call or drop me a message on social media @cookeco.
Please Click Here to link seamlessly to hundreds of interesting community and property-related articles, videos, and pictures on our local blog/property insights page, Thanet coastal interactive tour, Up to date latest properties for sale and to rent, and much, much more.
Before you go, we would love you to comment or like this article. Please feel free to give your thoughts, helpful comments, or even suggestions of articles you would like us to write about.
About Cooke & Co
Cooke & Co, a liked and respected estate agency trading since 1992, is conveniently situated in the picturesque seaside district of Thanet. We proudly operate from our local offices in the region's primary towns, namely Margate, Broadstairs, and Ramsgate. Additionally, our extensive reach encompasses the charming areas of Westbrook, Westgate, Birchington, Monkton, Manston, and Minster. Our presence in these diverse locales enables us to offer an enriched understanding and comprehensive service to the property market in these prime coastal towns and villages.
Contact our offices at the following numbers:
- Margate Office/Area: (01843) 231833
- Ramsgate Office/Area: (01843) 851322
- Broadstairs Office/Area: (01843) 600911
No comments
Leave a comment