Over the last year fewer than one in ten homes in Macclesfield sold for less than £100,000, the lowest figure on record. As recently as 2003 half of all homes in the town sold for under £100,000, the numbers going for five figures have rapidly dwindled as prices have soared in recent years.
Macclesfield lines of Victorian terraced streets have long been the towns most affordable homes and the way many first time buyers have got themselves onto the housing ladder. Built for silk mill workers during the 1850s, they still make up almost half of all homes in Macclesfield.
But 2016 saw almost all of these small two bed terraces pass the six figure mark, spelling the end of £100,000 Macclesfield home. Despite terraces making up two-thirds of the homes that sell for five figures, in 2016 just 15% of them went for less than £100,000. Many of these terraces are one bedroom homes previously converted from a two bed to meet modern requirements.
It was ten years ago that the last detached family home was sold for less than £100,000, while the last five figure semi was bought back in 2015. But there are still some options for first time buyers and those with smaller budgets. On current trends it will be at least another decade before it will no longer be possible to pick up a small town centre flat for a five figure price tag.
As markets go into turmoil at each bit of Brexit news, it’s worth looking behind the volatility and seeing what the latest set of economic numbers are actually showing us. The big news this month is the pick-up in inflation. It only reached 1 per cent, half of the Bank of England’s target, but the market only expected 0.6 per cent and this has caused some anxiety. It’s not because we weren’t expecting inflation to pick up – the drop in the currency means that it is inevitable – but because the increase in inflation “is not explicitly linked” to the fall in Sterling according to the Office for National Statistics.
Rather its rise is due to the cost of clothing and fuel compared with last year when their prices were particularly low. That doesn’t mean we should not expect price rises. Oil is priced in US$ and a 16 per cent fall in the US$/£ exchange rate means that this will flow through. And producer prices are now increasing as the effect of Sterling’s fall against major currencies hits too. That will hit all of our pockets in the coming months, especially as the cost of food and fuel – essentials we can’t avoid spending money on, rise.
But better news is that the UK’s labour market is still holding up despite the changes in sentiment across the rest of the economy. Even better news is that wage growth is still outstripping inflation which will provide some cushion to rising prices.
The Brexit shock…
The vote to leave the European Union (EU) has unsettled the housing market, but the major driver of its performance will be the path of the economy. That is uncertain as the arrangements for decoupling from the EU and the effect this will have on trade have yet to be seen.
…will weaken markets…
In our central scenario we expect the economy to weaken and for this to affect house price growth and transaction levels as consumer confidence, household incomes and the labour market are affected. We expect UK house prices to see a growth of just 2.5 per cent in 2016 and -1.0 per cent in 2017, before recovering to 2 per cent in 2018.
… and the North and Midlands don’t escape
While London and South Eastern markets are expected to see the largest slowdown in prices, the North and Midlands are also expected to slow. Weaker economic growth takes part of the responsibility, but so too will uncertainty about export tariffs and inward investment, despite the support of a weaker currency. However we expect the North West to see the strongest growth out of all regions in 2018 to make up for price growth historically lagging behind that of the South.
Supply shortages will support prices while ultra-low interest rates will help
to support demand…
The continuing lack of supply of property will remain a supportive factor for house prices across most of the country. And as the Bank of England has reduced rates and introduced more quantitative easing, mortgage finance will be available to help demand.
Uncharted territory brings big forecast uncertainties
There are higher than usual risks to these forecasts given the extraordinary nature of the challenges ahead. Most risks are to the downside and will be dominated by the UK’s ability to leave the EU in an orderly fashion and maintain its trade links and markets.
To download the full report click here
If you are looking to buy or rent a property in Macclesfield then have a look at what Bridgfords has to offer