Wilmslow has the kind of name-recognition -and upmarket reputation - many towns would kill for.
During the 1990's former Manchester United manager Sir Alex Ferguson – a long-time resident of the Torkington Road area – attracted big name footballers and their wives and girlfriends to the town. Wilmslow became trendy.
Today most of the WAGs have gone leaving the town with a glitzy party-people reputation that distracts from the reality of its solid, overwhelmingly local housing market. Today Bridgford’s researchers calculate that just 1 per cent of buyers are from London – the same proportion as Handforth – and that just 2 per cent of sales are on properties priced over £1m.
The reality is that 77 per cent of Wilmslow properties change hands for below – often well below - the headline-grabbing average detached price of £593,000. In other words, the town is more affordable than it looks. Unlike near neighbour Alderley Edge, Wilmslow has houses at all price-points, allowing those with a foot on the Wilmslow property ladder to climb higher without the upheaval of leaving. This local churn accounts for a high proportion of the market (65 per cent of buyers already live in Cheshire East). And there are bargains to be had: average sale prices went into reverse in the last twelve months – down 1.3 per cent.
Of course Wilmslow still has a top-end market. Torkington Road can claim sale prices in excess of £1.5m, whilst Hough Lane and Fletsand Road are not far behind. Developers have begun to buy-and-demolish older properties hoping for a mighty premium sale price: some hope a £1.3m property can be morphed into a £3m eye-catcher.
The town’s prospects now depend less on football and much more on local infrastructure and job prospects. The planned bioscience development at the former Astra-Zeneca site could also stimulate demand from those wanting to live close to their jobs, but priced out of highly competitive Alderley Edge.
Is a little bit of inflation a good thing? Maybe, maybe not?
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.
Fasten your seatbelts - it will be a bumpy time ahead, but not a hard landing.
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.