Supply and Demand Issues mean Bexley Borough Property Values Rise by 8.9% in the Last 12 Months
The most recent set of data from the Land Registry has stated that
property values in Bexley Borough were 8.97% higher than
12 months ago and 30.9% higher than January 2015.
Despite the uncertainty
over Brexit as Bexley (and most of the UK’s) property values continue their medium and long-term
upward trajectory. As economics is about supply and demand, the story behind
the Bexley property market can also be seen from those two sides of the
story.
Looking at the supply issues of the Bexley Borough property
market, putting aside the short-term dearth of property on the market, one of the
main reasons of this sustained house price growth has been down to of the lack
of building new homes.
The
draconian planning laws, that over the last 70 years (starting with The Town and Country
Planning Act 1947) has meant the amount of land built on in the UK today, only
stands at 1.8% (no, that’s not a typo – its one point eight percent) and that
is made up of 1.1% with residential
property and 0.7% for commercial property. Now I am not advocating building modern
ugly carbuncles and high-rise flats in the Cotswolds, nor blot the landscape with
the building of massive out of place ugly housing estates around areas
such as Dartford Heath.
The facts are, with the restrictions
on building homes for people to live in, because of these 70-year-old
restrictive planning regulations, homes that the youngsters of Bexley Borough badly
need, aren’t being built.
Looking at
the demand side of the equation, one might have thought property values would
drop because of Brexit and buyers uncertainty. However, certain commenters now
believe property values might rise because of Brexit. Many people are risk
adverse, especially with their hard-earned savings. The stock market is at an
all-time high (ready to pop again?) and
many people don’t trust the money markets. The thing about property is its
tangible, bricks and mortar, you can touch it and you can easily understand it.
The Brits have
historically put their faith in bricks and mortar, which they expect to rise in
value, in numerical terms, at least. Nationally, the value of property has
risen by 635.4% since 1984 whilst the stock market has risen by a very similar 593.1%.
However, the stock market has had a roller coaster of a ride to get to those
figures. For example, in the dot com bubble of the early 2000’s, the FTSE100
dropped 126.3% in two years and it dropped again by 44.6% in 9 months in 2007…
the worst drop Bexley Borough saw in property values was just 17.4% in the 2008/9
credit crunch.
Despite the slowdown
in the rate of annual property value growth in the Borough to the current 8.97%,
from the heady days of 19.7% annual increases seen in the autumn of 2014, it
can be argued the headline rate of Bexley property price inflation is
holding up well, especially with the squeeze on real incomes, new taxation
rules for landlords and the slight ambiguity around Brexit. With mortgage rates
at an all-time low and tumbling unemployment, all these factors are largely
continuing to help support property values in Bexley Borough (and the UK).
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