Turbulent Times Ahead in the Basingstoke Property Market?

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jordy Gillard
 
 
Now that everyone has returned from their summer holidays, and the new school terms have started, it is a good time to assess the market.
 
Since May 2017, the market in Basingstoke for both sales and lettings has been one of the most challenging in recent years. The number of new properties coming to the market is currently around half that of 12 months ago.
 
There have been many factors that have contributed to this as we have discussed before, not least of which are Brexit, the impact of the general election on the housing market, and the seasonal impact of the holiday season. During this time, we have seen a number of properties on the market reduce their pricing in order to achieve a timely sale or let.
 
On top of this, the Bank of England have made their strongest hint yet that a rise in interest rates may be likely, sparking a rise in the value of the pound against other currencies, and yet only on the 4th September, many economists forecast there would be no interest rate increase until 2019. The base rate has stood at 0.25% since August 2016.
 
According to the Halifax, “some buoyancy” is returning to the housing market as it reported house prices in the September House Price Index report.
 
According to the report, the average house price is now £222,293 in August, an increase of 1.1% on the previous month, and 0.1% higher than in the previous quarter (March to May), marking the first increase since March 2017.
 
The Halifax believe that prices will continue to be supported by the large array of low rate mortgage products available for both first time buyer and buy to let, as well as the continuing shortage of properties coming to the market for sale.
 
 
 

This data is supported by property sales in the Basingstoke area, where the number of properties sold on a monthly basis in 2017 is still roughly half the number that were being sold in 2016 as mentioned above.
 
On the rental side, rents are predicted to rise on average by 3% per year according to RICS. This is being driven by growth in the private rental market as younger people continue to rent rather than buy, and a lack of available rental properties. This is again consistent with Basingstoke where on average we have seen rent increase between 2% and 3% over the last 12 months.
 
ONS figures show that rental prices paid by tenants to private landlords rose by 1.7% on average in England in the year to the end of August 2017.
 
This does not apply to all properties however, as this is driven by demand, location and the condition of the property. Many landlords are finding that they need to start thinking about improving and modernising the condition of their properties as they compete with brand new rental properties coming to the market in Sherfield Park, Beggarwood, Chapel Gate, Churchill Place and Festival Apartments in Basingstoke, among several other sites.
 
The figures for September will be a good indication of any significant change in the market, but our view is that the market will remain relatively static until the end of the year. If there is a change in interest rates before the end of the year, although this is unlikely to be more than 0.25%, this may well extend the length of time the market remains flat.
 

Location: Basingstoke, UK

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