Local Life - Wigan - January 2021

26
Swing and a Miss?
When I pen these pieces at this time of year, I traditionally
reflect on what has happened in the Wigan housing market
over the past twelve months and try and give readers an
idea on what to expect in the New Year.
There is an old saying that goes, ‘Predicting the future is
easy - getting it right is the hard part’ and as we welcome
in the start of another year, we’re greeted with an
avalanche of Nostradamus-wannabes trying to predict
how house prices will perform in 2021.
The interesting part comes when one looks back on past
predictions to see who was on target and who missed
the mark by a country mile. Here’s two property-related
predictions that didn’t quite hit the mark.
For the first, roll the calendar back to when Covid-19 hit early
in 2020 and, despite a buoyant housing market still riding
the ‘Boris Bounce’, major financial economists and property
market commenters were predicting a property crash. The
more positive amongst them were predicting a 5% drop
in house prices by the end of 2020, but the forecasts from
most ‘experts’ ranged between a 10% to 15% drop.
And for the second, let’s wind back the calendar even
further - all the way back to 23rd June 2016 – that’s
right, the Brexit vote. It was the considered opinion of
Her Majesty’s Treasury, headed up by Chancellor George
Osborne, that national house prices would drop by 18%
if the country voted to leave the EU. Multiple ‘property
experts’ voiced similar concerns.
The table below illustrates how those predictions have
played out in the past 4½ years.
House Type
House Value
2016
Predicted Value
post-Brexit Result
Average Value
Today
The table shows that Wigan homeowners who own
detached homes would have seen an increase in their
property’s value equivalent to £99.23 a week. This is
calculated from the price they would have paid in the
summer of 2016 and the price they would sell for today.
On this basis, owners of semidetached homes would have
seen an increase in value equivalent to £70.77 per week,
owners of terraced homes/town houses of £36.15 per
week and apartment owners of £63.85 per week.
So why has the Wigan property market not matched
the property pundits twice in the last five years or so?
For most of us, getting on the property ladder is about
having somewhere to live rather than an investment, and
any increase in value is a secondary benefit.
Whilst panicked property predictions by ‘experts’ looking
for a quick headline won’t materially affect homeowners,
what they do is to frighten away those young people
who are about to step onto the housing ladder and that’s
regrettable because getting on the property ladder is,
for everyone who is on there for the long term, a great
investment.
So, what of 2021? It’s true that the country will have high
unemployment, yet at the same time, we have ultra-low
interest rates and for the last 20 years, on average we
have only built 150,000 households per year, but we need
300,000 homes per year to keep up with immigration,
people living longer and changes in the way households
are made up.
And what does my crystal ball say? Rightmove are
Uplift in Value in
Last 4.5 Years
Wigan Detached £250,100 £205,100 £275,900 £25,800 11.3%
Wigan Semi £137,700 £112,900 £156,100 £18,400 12.4%
Wigan Terraced /
Town House
£97,200 £79,700 £106,600 £9,400 10.7%
Wigan Apartments £99,000 £81,200 £115,600 £16,600 15.8%
% Increase since
Brexit Vote
predicting a rise of
4% in house prices in
2021, but the Halifax
are predicting a drop
of 5%, so I’m going to
sit on the fence and say
it will be something in
between!
Alan Batt is a member of The Royal Institution of Chartered Surveyors (RICS) and has
worked within the Wigan property market for over 30 years.
Alan Batt
For more of Alan’s tips, guidance and analysis on the Wigan property market, check out his blog at
www.alanbatt.co.uk