In or out? Brexit or Bremain? The EU referendum vote approaches and Britain’s possible exit from the European Union has caused all manner of claims about how the UK property market might fare. I have already discussed this topic in a January blog post here on Medway Property News. It could be worrying times for homeowners and landlords, especially as nobody really knows what short-term and long-term effects a Brexit could have on the Medway property market.
To get an idea of what could happen to Medway property prices, let’s look at the history of house price growth in Medway.
Starting with April 2001 we see that, according to Land Registry figures, average house prices in Medway followed a steady path, rising from £81,424 to a then-peak of £159,754 seven years later in February 2008. The economic crash caused prices to fall to a rockbottom low of £129,118 in September 2009. Not long after, prices briefly began to recover, falsely peaking at £140k in July 2010 before dropping again to 131k by the May of 2012. House prices in Medway began to really recover from May 2013 onwards and have been rising every year to a current peak of £184k, 15.7% higher than the peak in 2008.
This shows how Medway has recovered from the shock and sting of the economic crash, with what has been a very long and painful recovery from the recession.
Obviously these two examples are different in nature compared to the consequences of a successful Brexit or Bremain. However, I think they are symptomatic of some key external factors affecting house prices in Medway as well as across the country. Simply put, not enough houses are being built and there is increasing demand due to an increasing population. Unless lots more properties are built soon, house prices in the UK and South East are likely to continue to rise. Only 156,140 homes were built last year in Britain, well below the government target of 200,000 new homes a year. Construction in London actually slowed down and dropped by 9% to 25,994 in 2015.
On the other hand, if a Brexit is perceived as a good thing for Britain then it could actually drive foreign investment from other countries into the London and Medway property market, therefore pushing up prices even higher. It’s impossible to tell as both sides haven’t made public enough information on what a Brexit or Bremain will look like.