If you read all the newspapers, the Brexit debate seems to
be focused solely on central London. Many commentators have said Brexit would
mean central London would have a lower standing in the world, meaning less
people would be employed in Central London, with the implication of lower
wages, fewer jobs etc., in Central London ... but we are in Bingham, not
Marylebone, Mayfair or any part of Zone 1 London.
Now on the run up to the vote on the 23rd of June, I predict the
‘in’ camp will start to scare homeowners with forecasts of negative equity, and
the ‘out’ camp will appeal the 20
somethings, who have been priced out of the property market with the
prospect of a new era of inexpensive housing, should the fears of central
London estate agents and developers (who believe the bottom will fall out of
the market if we do leave) become real. The only reason
the Mayfairs, Knightsbridges, and Kensingtons 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 Bingham and central London is 128 miles away. We are hometown to Bingham
Cricket Club and have been a popular location for various film and television
scenes, and whilst the central London property market exploded after 2009, that
explosion really and honestly didn’t affect the Bingham property market. So,
putting central London aside, what would an ‘in’ or ‘out’ vote really mean for
the 3,000 property owners of Bingham?
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 Bingham increased by
0.66%, not bad for a country that thought it would get a hung parliament! So
that argument doesn’t hold much weight with me.
I believe that a
vote to stay in the EU would see the Bingham property market return to a status
quo very quickly, but the contrasting result could lead to some changes. The principal
menace to the Bingham (and UK) housing market could be variation (in an upwards
direction) in interest rates as a result of a Brexit, which could theoretically
see the cost of mortgages grow swiftly, pricing many out of the market … but
then two thirds of landlords buy without a mortgage, so that won’t affect them.
I suspect whatever decision the electorate of Bingham
and the country as a whole makes, over the long term it won’t have a major
effect on the Bingham 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 127.87% higher than 21 years
ago in Bingham and are 3.6% 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 Bingham property market, but
in the long term (and property investment is a long term strategy) there aren’t
enough houses in Bingham to live in either to buy or rent … and until the
Government allow more properties to be built – the Bingham 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!
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