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.
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ReplyDeleteI am intrigued how Brexit would influence the property market in Spain. It is extremely popular among Briton. According to https://tranio.com/spain/analytics/tourism_terrorism_and_british_buyers_spains_property_market_in_2016_5029/ the British bought over one in five homes in Spain sold to foreign nationals, who accounted for 46,728 transactions (13% of all sales) last year. I guess Spain will suffer a lot if the UK make a decision to leave The pound is going strong against the Euro so to buy a house in Spain may be affordable. But leaving the EU would probably change everything.
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