What would Brexit mean to the 180,300 Warrington Property owners?

I don’t know about you, but I find if you read the Daily Mail, there are only three topics that make the blood of ‘Middle England’ boil.

Bureaucracy from Brussels. House Prices. The late Princess of Wales.

If we as a country were to unshackle ourselves from chains of Brussels, could we inadvertently affect the second topic and make UK house values drop?

If you read all the newspapers, the Brexit debate seems to be focused solely on central London. Many commentators have said the Brexit would mean central London would have a lower standing in the world, meaning fewer people would be employed in Central London. That implies lower wages, fewer jobs etc… in Central London.

But we are in Warrington, not Marylebone, Mayfair or any part of Zone 1 London.

On the run up to the vote on 23^rd June I predict:

In Camp 

The ‘in’ camp will start to scare homeowners with forecasts of negative equity.

Out Camp 

The ‘out’ camp will appeal to the 20 something market, which have been priced out of the property market with the prospect of a new era of inexpensive housing.

That is, should the fears become real of central London estate agents and developers, who believe the bottom will fall out of the market if we do leave. The only reasons the Mayfair, Knightsbridge, and Kensington property of central London are attractive to foreign buyers are political and economic steadiness, an open and honest legal system and a lively cultural life.

None of that is threatened by Brexit.

...But again, we are in Warrington and central London is 203 miles away.

We are hometown to the Warrington Wolves, Ian Brown and Chris Evans. While the central London property market exploded after 2009, that explosion really, and honestly, didn’t affect the Warrington property market.

So, putting central London aside, what would an ‘in’ or ‘out’ vote really mean for the 180,300 property owners of Warrington?

Initially, over the coming months, on the run up to referendum, I believe it will be like the run up to last year’s General Election. With the short-term uncertainty in the country, quite often, big decisions are put on ice and people are less likely to make big money purchases i.e. buy a property.

However, in the four months up to last year’s Election, property values in Warrington decreased by only 0.3%... not bad for a country that thought it would get a hung parliament!

That argument doesn’t hold much weight with me.

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 would see the Warrington property market return to a status quo very quickly, but the contrasting result could lead to some changes.

The principal menace to the Warrington (and UK) housing market could be variation (in an upwards direction) in interest rates, theoretically seeing the cost of mortgages grow swiftly, pricing many out of the market…

But, two thirds of landlords buy without a mortgage, so that 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 all mortgages as a whole, according to the Bank of England, 44% of all UK mortgagees have a fixed rate mortgage, but 56% don’t, so if you aren’t on a fixed rate ... talk to your mortgage broker now, because they can only go in one direction!

In reality, if I really knew the future, I wouldn’t be a letting/estate agent in Warrington, but a City Whiz Kid in London earning millions.

However, I suspect whatever decision the electorate of Warrington and the country as a whole makes, over the long term it won’t have a major effect on the Warrington property market. We have seen off

-          the ‘end of the world’ credit crunch of 2008/9 and subsequent property crash

-          the 1988 Nigel Lawson induced post dual-MIRAS property crash

-          the 1979 Winter of Discontent property crash

-          the 1974 oil crisis that stimulated another property crash...

Hell, we can even go back nearly a century with the 1926 post General Strike slump in property prices...

  

  

Today, property prices are 217.35% higher than 21 years ago in Warrington and are 3.22% higher than 12 months ago.

So, make your own decision on 23rd of June 2016 safe in knowledge that whatever the result, there might be some short term volatility in the Warrington property market, but in the long term (and property investment is a long term strategy) there aren’t enough houses in Warrington to live in either to buy or rent… Until the Government allow more properties to be built – the Warrington property market will be just fine. Even if it has a little blip in the summer, there could be some property bargains on the run up to Christmas to be had!

For more advice and opinion on the Warrington property market, even where those buy to let bargains could be found now - visit the WarringtonProperty Blog.

If you are a landlord or thinking of becoming one for the first time, and you want to read more articles like this about the Warrington Property Market together with regular postings on what I consider the best buy to let deals in Warrington, out of the many of properties on the market, irrespective of which agent is selling it, then feel free to get in touch! email me on manoj@hamletwarrington.co.uk If you are in the area feel free to pop into the office we are based on 6 Bankside, Crosfield St, WA1 1UP plenty of free parking and the kettle is always on.


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