𝗪𝗮𝗿𝗿𝗶𝗻𝗴𝘁𝗼𝗻 𝗣𝗿𝗼𝗽𝗲𝗿𝘁𝘆 𝗜𝗻𝘀𝗶𝗴𝗵𝘁𝘀: 𝗜𝗴𝗻𝗼𝗿𝗶𝗻𝗴 𝘁𝗵𝗲 𝗗𝗼𝗼𝗺 𝗠𝗼𝗻𝗴𝗲𝗿 𝗛𝗲𝗮𝗱𝗹𝗶𝗻𝗲𝘀

Navigating the property landscape, particularly in a town like Warrington, 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 Warrington 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.

𝗪𝗮𝗿𝗿𝗶𝗻𝗴𝘁𝗼𝗻𝗵𝗼𝘂𝘀𝗲𝗽𝗿𝗶𝗰𝗲𝘀𝗮𝗿𝗲𝗼𝗻𝗹𝘆𝟮.𝟭% 𝗹𝗼𝘄𝗲𝗿𝘁𝗵𝗮𝗻𝘁𝗵𝗲𝗶𝗿𝗽𝗲𝗮𝗸𝗼𝗳𝗡𝗼𝘃𝗲𝗺𝗯𝗲𝗿𝟮𝟬𝟮𝟮.

(£267,791 November 2022 to £262,067 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 Warrington 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.

𝗕𝘂𝘁𝘄𝗵𝗮𝘁𝗶𝗳𝗪𝗮𝗿𝗿𝗶𝗻𝗴𝘁𝗼𝗻𝗵𝗼𝘂𝘀𝗲𝗽𝗿𝗶𝗰𝗲𝘀𝗱𝗿𝗼𝗽𝗽𝗲𝗱𝗳𝗿𝗼𝗺𝘁𝗵𝗲𝗽𝗲𝗮𝗸𝗶𝗻𝗡𝗼𝘃𝗲𝗺𝗯𝗲𝗿𝟮𝟬𝟮𝟮𝗯𝘆𝘁𝗵𝗲𝘀𝗮𝗺𝗲𝗽𝗲𝗿𝗰𝗲𝗻𝘁𝗮𝗴𝗲 (𝟮𝟬.𝟵%) 𝗮𝘀𝘁𝗵𝗲𝘆𝗱𝗶𝗱𝗶𝗻𝘁𝗵𝗲𝗴𝗹𝗼𝗯𝗮𝗹𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹𝗰𝗿𝗮𝘀𝗵𝗶𝗻𝟮𝟬𝟬𝟴/𝟵?

If that were the case, Warrington house prices would just return to the Land Registry house price levels achieved in January 2021 (£212,956) – and nobody was complaining about those! (Although the number of people in negative equity would increase slightly).

As Warrington 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. 

Warrington 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. 

𝗦𝗼𝘄𝗵𝗮𝘁𝗱𝗼𝗲𝘀𝘁𝗵𝗲𝗳𝘂𝘁𝘂𝗿𝗲𝗵𝗼𝗹𝗱𝗳𝗼𝗿𝗪𝗮𝗿𝗿𝗶𝗻𝗴𝘁𝗼𝗻𝗵𝗼𝗺𝗲𝗼𝘄𝗻𝗲𝗿𝘀?

For homeowners in Warrington, 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, 𝗽𝗿𝗼𝗽𝗲𝗿𝘁𝘆𝘀𝗵𝗼𝘂𝗹𝗱𝗼𝗳𝘁𝗲𝗻𝗯𝗲𝘃𝗶𝗲𝘄𝗲𝗱𝗮𝘀𝗮𝗹𝗼𝗻𝗴–𝘁𝗲𝗿𝗺𝗶𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁.

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 Warrington is no exception.

For the residents and homeowners of Warrington, understanding the broader tapestry of property dynamics is paramount. Consider these vital elements:

• Global and Local Economic Factors: Warrington’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.

• Warrington’s Rich Tapestry: With its historical charm, coupled with an array of property types ranging from vintage homes to contemporary modern brand-new homes, Warrington offers resilience against sweeping market downturns. This diversity provides both stability and opportunity.

• Infrastructure & Growth: Warrington’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. Warrington’s strategic location, history, and vibrant community make it a perennial attraction for renters. For Warrington homeowners, this can translate to a steady income stream even if the sales market looks less favourable.

• Historic Resilience: A glance at Warrington’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 Warrington 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 Warrington’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 Warrington property market, do not hesitate to give me a call or drop me a message on social media.