Mainland UK has been the target of numerous terrorist attacks over the years but few have had any significant impact on local property prices. However, the novichok attack in Salisbury seems to have broken this mould with house prices falling by 8.8% in the three-month period from May to July 2018. There are others other factors to consider but there is no doubt that the novichok poison issue has had an impact on external demand for property in Salisbury.
Average house prices in Salisbury
During the period in question the average cost of a property Salisbury fell from £328,243 to £299,207 with the initial poisoning incident taking place in March. Maybe if the initial incident had been in isolation the impact would have been less severe. However, it would appear that the novichok poison had been discarded in the city. While it is impossible to say with total confidence, it does look as though incidences of novichok poisoning have come to a close.
Local estate agents have confirmed a significant reduction in interest from investors outside of Salisbury. Interestingly, prior to the poisoning incidents up to 65% of homes in Salisbury were sold to those outside of the area. At this moment in time that demand seems to have evaporated completely although local estate agents will be monitoring figures very closely for signs of a recovery. It is worth noting that over the period in question; house prices have increased by 1.9% across Wiltshire with neighbouring counties also reporting house price growth.
Is this a sign of things to come?
Many people will be shocked to see the extent of house price falls in Salisbury as a consequence of the poisoning incidents. If all of the novichok poison had been found after the first incident then the fall would likely have been much less, maybe even no impact. The cumulative damage caused by further scares and actual poisonings has not only impacted house prices but also local businesses. In the immediate aftermath of the initial poisoning it is said that town centre footfall fell by as much as 80%. When you consider the scare stories, rumours and counter rumours in circulation after the first poisoning, this was probably to be expected.
Investment opportunities in Salisbury
In any investment market there will come a time when the cumulative impact of events reaches a crescendo leading to an irrational and excessive fall in asset values. We see this all the time on stock markets and this may well be a similar incident in Salisbury. Terrorist activities often fade into the background in time, life goes on and investors learn to live with such shocking incidents. There may well be some opportunities to pick up “cheap stock” in Salisbury although time will tell.
Once the cloud of uncertainty hovering over Salisbury has evaporated it is highly likely that investors will return. Indeed, recent comments suggest that London homeowners have been cashing in their “London premium” looking to reinvest and obtain better value for money. London property investors provided a strong stream of interest in Salisbury in years gone by and it will be interesting to see whether this returns.