Back to newsletters

Swansea Property Market Post Brexit

In late May 2016, the Chancellor George Osborne predicted that if the UK voted to leave the EU, house prices would fall by 10% by the middle of 2018. Eight months on from the Referendum, are we beginning to show signs of that prediction coming true?

 

UK Builders and Inflation

Builders act as a good barometer for the housing market in the UK. In the two weeks following the Referendum, both Barratt and Taylor Wimpey saw their share prices fall (by 42.5%, and 37.9% respectively).

 

Looking at the most recent set of data from the Land Registry, property values in Swansea are only 0.14% up month on month (and the month before that, they had decreased by 0.59%).

 

To make matters worse, as the value of the pound decreased in the wake of the Referendum, inflation is expected to rise – potentially as high as 3%, if not higher. If this happens, the Bank of England could raise interest rates from 0.25% to 2%.

 

So is it time to panic and run for the hills?

 

Well, no. As I mention to all my investor landlords, property is all about the long term plan, and looking at it in the short term doesn't work anymore. The days of property in Swansea rising 10% year on year (when I was a sprightly 20-something junior negotiator on Walter Road) are long gone.

 

Values in Swansea

Regardless, property values in Swansea are still 3.5% higher than a year ago, meaning the average value of a Swansea property today is &164,600.

 

The Swansea housing market has been steadfast partly because, so far at least, the wider economy has performed better than expected since Brexit. Despite the initial set back, share prices in both Barratt and Taylor Wimpey had recovered by July.

 

Unemployment

Unemployment in the Swansea City and County Council area stands at 6,300 people (5.3%), which is considerably better than in 2012, for example, when there were 10,100 people unemployed (9.4%) in the same council area.

 

The threat of Brexit and increasing inflation aside, the greatest risk to the Swansea housing market – and the British housing market beyond – is that there are simply not enough properties being built, which keeps house prices artificially high. That might be good news for those on the property ladder, but not for those first-time buyers who, instead, will continue to need to rent good quality properties in Swansea.

 

If you'd like to discuss any of the issues raised in this article, and/or find out how much your property might be worth on the rental market in 2017, please feel free to pop in the office. 

 

Source: Land Registry / Zoopla House Price Report


Back to newsletters

Report Maintenance