Basingstoke Property Market - Eight Months On From Brexit

In May last year, George Osborne published an official HM Treasury analysis stating UK house prices would be lower by at least 10% (and up to 18%) by the middle of 2018 compared with what would have been expected if the UK remained in the European Union. So, eight months on from the Referendum, are we beginning to show signs of that prophecy? The simple answer is yes and no.

 

Good barometers of the housing market are the share prices of the big UK builders. Much was made of Barratt’s share price dropping by 42.5% in the two weeks after Brexit, along with Taylor Wimpey’s equally eye watering drop in the same two weeks by 37.9%. Looking at the most recent set of data from the Land Registry, property values in Basingstoke are 1.55% down month on month (and the month before that, they weren’t much better with a decrease of 0.04%) – so is this the time to panic and run for the hills?

 
Well, it’s certainly not the Doom and Gloom it may appear.

As we have mentioned in the past, being a property owner and/or a landlord is a long-term investment, so it is dangerous to look at price comparisons over the short term. Yet it might surprise you during those impressive years of house price growth between 2011 and 2016, the growth wasn’t smooth and all upward. Basingstoke property values dropped by an eye watering 1.11% in March 2012 and 1.27% in July 2013 – and no one batted an eyelid then.

Property values in Basingstoke are still 9.35% higher than a year ago, meaning the average value of a Basingstoke property today is £339,600. Even the shares of those new home builders Barratt have increased by 43.3% since early July and Taylor Wimpey’s have increased by 37.3%. The Office for Budget Responsibility, the Government Spending Watchdog, recently revised down its forecast for house-price growth in the coming years - but only slightly.

The Basingstoke housing market has been steadfast partly because, so far at least, the wider economy has performed better than expected since Brexit. There is a robust link between the unemployment rate and property prices, and a flimsier one with wage growth. Unemployment in the Basingstoke and Deane Borough Council area stands at 3,600 people (3.7%), which is considerably better than a few years ago. In 2013 when there were 5,200 people unemployed (5.5%) in the same council area.