What would Brexit mean to the 41,000 Solihull Property owners?

If you read all the newspapers, the Brexit debate seems to be focused on central London. Many commentators have said leaving Europe will mean central London would have a lower standing in the world, meaning fewer people will be employed in Central London with the implication of lower wages and not so many jobs for those in the city. We are in Solihull however, not Marylebone, Mayfair or any part of Zone 1 London.

Solihull is home to Land Rover’s main production plant, Alcott Wood and are the birthplace of Richard Hammond. Whilst the central London property market exploded after 2009, that explosion honestly didn’t affect the Solihull property market. So, putting central London aside, what would an ‘in’ or ‘out’ vote really mean for the 41,000 property owners of Solihull?

Initially, over the coming months on the run up to referendum, I believe it will be similar to the run up of last year’s General Election, with short-term uncertainty big decisions will be put on ice and people are less likely to make big money purchases for example buying a property. However, in the four months up to last year’s election, property values in Solihull increased by 1.42%, not bad for a country that thought it would get a hung parliament!

Post vote, should the UK opt to leave Brussels there would be a much more noteworthy impact. I believe that a vote to stay in the EU will see the Solihull property market return to a status quo very quickly, but the contrasting result could lead to some changes. The principal menace to the Solihull (and UK) housing market could be variation (in an upwards direction) in interest, which could theoretically see the cost of mortgages grow swiftly. This will price many out of the market however two thirds of landlords buy without a mortgage, so this won’t affect them.  According to the Bank of England 80.33% of all new mortgages taken out in 2015 were fixed rate. Looking at mortgages as a whole, according to the Bank of England, 44% of all UK mortgagees have a fixed rate mortgage, but 56% do not so if you aren’t on a fixed rate ... my advice is to talk to your mortgage broker now, as interest rates can only go in one direction!

I suspect whatever decision the electorate of Solihull and the country as a whole make, over the long term it won’t have a major effect on the Solihull property market. We have seen off ‘the end of the world’ credit crunch of 2008/9, subsequent property crash, the 1988 Nigel Lawson induced post dual-MIRAS property crash and many more!

Today, property prices are 163.21% higher than 21 years ago in Solihull and are 6.4% higher than 12 months ago. So, make your own decision on 23 June 2016 safe in the knowledge that whatever the result, there might be some short term volatility in the Solihull property market.  In the long term, the Solihull property market will be just fine, even if it has a little blip in the summer and property investment is a long term strategy.

For more advice and opinion on the Solihull property market, please pop into our Solihull property lounge for a drink and chat.