Basingstoke Property Values Continue to Increase

Basingstoke property values have been increasing steadily, and went up 0.66% last month alone, leaving Basingstoke property values 13.1% higher than a year ago. An increase in demand from buyers and an uninspiring level of supply (i.e. the number of properties on the market) has driven up the value of the Basingstoke’s housing. Values are 18.5% higher than 20 months ago.

The usually wary RICS said throughout the UK, most of its Chartered Surveyors anticipated house prices to increase in the next six months which seems contradictory, given some of the economic cautions from the government and HM Treasury. Even though inflation will rise to around 2% to 3% in 2017 and perhaps a little more in 2018 because of Sterling’s devaluation, together with a high probability of a decelerating GDP and a slight rise in unemployment, how can the RICS and most of my landlords be so confident about the value of our homes?

 
We have to look at the market conditions we are starting from. Nationally, a record low level of unemployment, low inflation and low interest rates, which is combined with a Basingstoke economy is doing quite well for itself. Confidence also plays a part. Confidence can supersede basic economic facts for a short time at least, which is why actual property market changes tend to be more exaggerated, as confidence can turn both positive and negative very quickly. The fact is, there is a long-term relationship between property values, wages and unemployment. For example, looking at the graph below, you can quite clearly see the ratio of property values to earnings is nowhere near as high as 2008 and currently is in the middle of the range for the last 30 years. As a country, we are in a good place.
 

By April 2017, Article 50 will be invoked. This will bring additional political and economic turbulence. With both purchasers and vendors heavily influenced by the 24-hour news cycle, which let’s face it, gets more haphazard by the day, it is likely this will prove challenging for the next couple of years. Basingstoke property values might drop slightly in 2017, but based on what we know now, the UK and Basingstoke property values are not projected to move that much over 2017 or 2018.  Going into the next two years, we are in much better financial shape as a country compared to the last two crashes of 1987 and 2008.

Confidence will continue to be the key player in the Basingstoke housing market for a while longer, and we expect to continue to see this spur much needed market activity for both sales and lettings.