Autumn on my mind...

Fewer homes have been on the market in 2018 than in any year of the past decade, the UK's biggest mortgage lender has said.

The Halifax said house-hunters have been left with relatively little choice, which means that prices have still risen as a result. House prices rose by 2.5% in the year to the end of September, with the average home costing ￡225,995, it said.

Why? And why is this relevant to the Isle of Man?

Simple supply and demand.

Just like the UK, we still enjoy low mortgage rates and more of us are in work meaning that demand for homes remains steady, particularly at the lower end of the market, up to, say, ￡400,000. But we, like the UK, have less readily available stock on the market for you to buy. In the UK the property market is witnessing the lowest stock levels in a decade with little on the menu to feed the machine. The ‘back to work’ bounce, usually expected post summer holiday, hasn’t happened. Looking at the Zoopla local listings, I’d argue we’ve had a similar experience on Island. 

So give me an example of what the effects are? 

Prices of starter homes, homes that are like hen’s teeth to find, two bedroom modern purpose built homes, have gone up - I’d estimate that we’ve seen 10% growth in the prices of this type of house since 2015/6. This pattern hasn’t, however, followed itself up the ladder as you might expect I’m afraid although good quality, well finished and sensibly priced homes between ￡220,000 - ￡400,000 are still selling well. Over priced homes simply aren’t selling. Why? Again, all boils down to our desires to move house (up or down the ladder), supply and demand and what you and I think about the economy in general. These are usually the material reasons behind why and when we make larger financial decisions. 

What about Brexit? I can’t really speak for the overall feeling in the UK - and this isn’t about whether the UK should leave or remain. But it MUST and WILL affect the Isle of Man. If continued uncertainty in the UK as to the type of deal they get continues, it could lead to an economic slowdown in the immediate and then short-medium term. At the moment, there seems to be a supply and demand parity, i.e. the demand for and supply of housing is about equal. If there is a squeeze on household budgets, it could lead to a decline in activity in the market. 

In the UK (and to a large extent on the Isle of Man) there is already a low supply of well-priced quality homes for sale. There are record low interest rates (for borrowers) in both places too. So in my mind, that surely equals opportunity for buyers doesn’t it? 

So negotiate hard, and buy now to get the best deal you can possibly get because to be perfectly frank, nobody knows what is going to happen across the water, and nobody in Tynwald knows how it will really affect us after Brexit in March 29 2019. If there is a ‘No Deal’ situation, prices may drop in the UK - here too maybe, but that’s not certain by any means. In this instance, the UK market may get swamped with stock. Is this a good thing I hear you ask? Yes. Because they have little stock now, so if more stock is listed it should sell. And more sales (reflective of an increase in demand) could lead to price rises. Will this happen on the Isle of Man too? Truthfully, we don’t know. But if there was even the slightest possibility, I’d take advantage now, rather than wait. 

Don’t see your home as an investment; it’s your home. A place for you and your family to feel safe, to enjoy and to make memories. If you always remember that, whatever happens in the short term won’t really matter anyway.