If you’re anything like me then your Linkedin, Facebook and Twitter feeds have no doubt been full of Brexit news, stories, anger or petition requests to get the vote re-counted and if I’m honest I’ve tried to avoid it for the last 24 hours as there is a lot of negativity going around. Of course in my usual conversations with the lovely local people of Penicuik there have been a number of questions about house prices and whether I expect to see a drop and whether investors should hold off buying property at the moment.
Two weeks after Brexit, I guess there are a couple of ways to look at this……
If you decide not to buy as a result of the referendum and property prices drop then in the short term you will have certainly won. Your money will still be in the bank earning you no interest but at least you won’t have lost anything.
If you are brave and decide to buy that investment property anyway and the market drops 5-10% you would no doubt be a bit miffed and think it was probably a bad decision. Let’s say that property cost you £150,000 then you could be looking at a loss of £7,500-£15,000.
With the above in mind, I was trying to consider whether I would advise putting a hold on your next purchase ‘just in case.’
We don’t know what the effect of Brexit will be on the local market yet. We don’t know how long it will take to trigger Article 50 and, once it is triggered, we don’t know how long it might take to sort all of the issues out but we do know there will always be a strong demand for rental property in Penicuik.
If you are worried about house prices in Penicuik then it might be worth considering this…..
2006 to today ....
In 2006, the average value of a Penicuik property was just £145,703 back then and broken down by type it was: Detached £248,292; Semi-detached £152,469; Terraced £115195; Flat £100,166.
The average value of a Penicuik property today is £174,540 and broken down by type it was: Detached £300,219; Semi-detached £187,323; Terraced £140,296; Flat £121,730.
This means in the last 10 years the average value of a Penicuik property has increased by 20% and it is similar by type of property eg terraced house.
Going back further ....
Go back 20 years and you find that the average value of a Penicuik property was £48,979 which broke down by type as follows: Detached £97,671; Semi-detached £50,884; Terraced £39,177; Flat £36,258.
So over the past 20 years a Peniciuik property’s average value has increased by 256.36% - the spread by type of property is greater: Detached 207.38%; Semi-detached 268.14%; Terraced 258.11%; Flat 235.73%.
Property is for the long term ....
We often talk about property investment being a long term thing and if you’re in it for the long term and can weather the storms then you will probably do alright. I have bought my properties fairly consistently over the last 20 years, I have been through many property booms and traumas and guess what……
I’ve done alright out of it! If prices drop 10%, I will still have done alright out of it.
Now don’t get me wrong. I’ll be a little upset if they do drop 10% but my personal opinion is they won’t.
If over the next 10-20 years (which is what I would call holding a property long term) we experience anywhere near the same kind of growth a small blip will not make a huge difference.
At the moment people are being cautious and this could present itself as an opportunity for anyone looking to buy a property in Penicuik as fewer people will be jumping in with both feet.
I’m not suggesting you rush out to buy a property but fortune favours the brave and either way in 10-20 years’ time you will probably have done alright!
Don't agree with me; let me know
I’m sure there will be plenty of people that disagree with me. I’d love to hear from you whichever side of the fence you sit on so please do give me a call (01968 674601), send me an email (email@example.com) or pop into the office (6 Bank Street, Penicuik) and I’ll be happy to discuss this or anything else property related.
A few more interesting articles about the Penicuik property market:
- Post EU referendum – will history repeat itself in the Penicuik property market? http://bit.ly/296A2pD
- Scotland votes remain, UK votes leave – what now for the 5,302 Penicuik landlords and homeowners? http://bit.ly/293AhoM
- Penicuik property – weirdest deal breakers http://bit.ly/28QAmw4
- Penicuik or Dalkeith for a Buy to Let investment. Which is the best? http://bit.ly/1Pv7ouS
- Who is to Blame for Crisis in the Penicuik Property Market? http://bit.ly/1VOjs0V