How house prices have changed in Borehamwood over the last two years
Eddison Wells is privileged to have an office in Borehamwood. As as a Borehamwood Mortgage Broker we value the opportunity to
Borehamwood house prices have shown some interesting trends over the last few years. Whilst initial fears of a Brexit related house price crash proved to be unfounded, there has been a notable slowdown in the rate of increase over the last 12 months.
If you're buying or selling houses in Borehamwood or the surrounding area then you'll want to know what the local market is doing. We've performed an in depth analysis of the trends over the last few years and pulled together a few theories on what will happen next. These are the essential facts you need if you're in the Borehamwood property market.
Who is moving to Borehamwood?
Borehamwood's position in north London, well inside the M25 has long made it a popular choice for families looking to escape the hustle and bustle of central London. More recently, the huge rises in London property prices have pushed hundreds of young professionals out of the city centre towards communities like Borehamwood. This has caused prices to spiral. According to Zoopla.com the average property price in the area has increased by over 300% in the last 20 years. The current average value of houses in Borehamwood stands at £407,000.
How do the prices compare?
Borehamwood's average asking price of £407,000 may be high compared to the rest of the UK but it's low compared to the surrounding area. The average price of a property in Hertfordshire is £46,000 higher than in Borehamwood. This is despite Borehamwood having the advantage of lying within the Transport for London fare zone structure. This means that commuting costs are lower than other London commuter communities in Buckinghamshire or Surrey, where the cost of a day travelcard can easily exceed £30.
The green belt factor
While Borehamwood town centre is not considered to be part of the green belt, the entire surrounding area is. This significantly restricts the amount of development that can take place and makes it very difficult for developers to construct new homes. The general stability of house prices over the last two years is partly attributable to this lack of construction.
The green belt is likely to keep Borehamwood house prices high for many years to come. The government has discussed the possibility of altering the rules around green belt development but any changes would meet significant opposition from communities like Borehamwood. With the government's agenda filled by Brexit and a number of other issues, it is unlikely that they will choose to change the rules on green belt development in the near future.
What's happened in the last two years?
The rate of property price increase in Borehamwood has slowed significantly in the last two years. The average annual increase has fallen from around 7% to only 1%. That's lower than the rate of inflation and means that local income growth is outpacing house price growth for the first time since the financial crisis of 2008.
At the same time, the asking price for central London properties has started to fall. This may reduce the number of young families and couples coming to communities like Borehamwood is search of lower housing costs. Any drop in demand for housing like this would cause a further softening of average asking prices.
What will happen next?
Brexit remains a major unknown factor in the UK housing market. Until we have more clarity about the type of deal Britain will get and what this means for the UK economy, it is likely that the housing market will be relatively quiet. Any talk of a 'hard Brexit' may reduce the appetite of foreign buyers to purchase central London property. If this happens, there would then be a glut of property on thw market that would be sold at a much lower price than it currently is. Again, this would reduce the number of people who look as far afield as Borehamwood when they're looking for a property with easy access to Zone 1.
Other factors to consider
On the other hand, not everyone who moves to Borehamwood does so simply because they can't afford to live in central London. The area provides a much more relaxed and family friendly atmosphere than most areas in inner London and it will always appeal to families for this reason. What may change is the mix of properties that are bought and sold. If property prices in central London do drop significantly then the prices of flats will see the most sever impact. Family homes, particularly large detached homes, are unlikely to take as severe a dent.
House prices also track the general performance of the UK economy. In the event of a recession or slowdown, the London and Home Counties property market would expect to take a hit. Again, Brexit uncertainty makes it almost impossible to predict the general performance of the UK economy - the picture should become much clearer in the next 12 months.
Borehamwood house prices have performed solidly, if not spectacularly, over the last two years. Predicting the next two however is much more difficult. The number of factors to consider is even higher than usual. However, the old rule of house buying still applies. You're buying a place to live, not just an investment. Whilst considering the market is important, you want to find a home you and your family will be happy in.