The royal factor? Let’s not rely on Prince Harry to save the property market
John Phillips (pictured) is group operations director at Just Mortgages and SpicerHaart
Recent figures have shown that major royal events such as royal births and weddings have historically sparked an increase in monthly house prices across the country. This trend was evident back in April 2011 when Will and Kate married, resulting in a 1.55% increase in property prices on a month-by-month basis. Prices also increased by 1.12% month on month when Prince George was born. These events have clearly had a positive impact on the property market.
However, other key events have negatively impacted the market, and in the Queen’s recent birthday statement she acknowledged the “sombre national mood”. The Brexit vote last June triggered a sense of panic in the financial markets, and the decision trickled down to decision makers as shocked consumers ditched their spending plans and braced themselves for uncertainty. In addition, the Grenfell Tower blaze could also affect consumers’ purchasing habits. It’s been reported that around 600 high rise buildings having similar cladding, so it’s possible that some people will opt for a low rise option when buying or renting. In fact, the blaze has had a far-reaching impact, with tower block apartment prices set to drop in Australia as a result.
But what happens when the royal aren’t getting married or having children? How can we ensure the nation’s mood and, more specifically, market and consumer sentiment improves? Firstly, positivity breeds positivity so let’s not talk ourselves into a downturn. In fact, according to recent industry statistics, sentiment is more than double what it was this time last year and UK house prices bounced back in June after three months of falls.
Secondly, we must ensure that consumers are not only aware that interest rates could rise sooner than anticipated, but understand exactly how a hike in interest rates could affect them financially so they are as prepared as they can be. Some borrowers may rush to beat the rising rates while others will stay put to see the lay of the land, but either way, customers need their brokers to be proactive.
Mortgage advice from a reputable broker will increasingly be seen as an invaluable service, particularly as we continue to face uncertain times. So let’s not rely on a royal wedding to help the housing market; let’s prepare ourselves and our customers for change.