Even the most sane person in Britain has to admit the Brexit vote will, in one shape or another, affect the UK Property market. Excluding central London which is another world, most commentators are saying prices will be affected by around 10%.
So looking at the commentators’ thoughts in more detail, property values in Erdington will be 10% lower than they would have been if we hadn’t voted to leave the EU. As the average value of a property in the Birmingham City Council area is £157,500, this means property values are set to drop for the average Erdington property by £15,750… batten down the hatches .. soup kitchens and mega recession here we come ..it’s going to get rough. .. but before we all go into panic mode in Erdington .. the devil is always in the detail Look at the phrase again, and I have highlighted the relevant part “Property values in Erdington will be 10% lower than they would have been if we hadn’t voted to leave the EU”.
Property values today, according to the Land Registry are 8.1% higher than a year ago in the Birmingham City Council area. The 12 months before that they rose by 5.8% and the 12 months before that, they rose by 5.35%. If we hadn’t voted to leave I believe, based on these figures, we could have safely assumed Erdington house prices would have been 8% higher by the Summer of 2017. … and that’s the point, we won’t see a house price crash in Erdington, it’s just that house prices in a years time will be 2% lower than they are now (ie 8% less the 10% lower figure because of Brexit).
Let’s look at the historic figures and how that compares to today’s figures for the Birmingham City Council area and Erdington as a whole.
|Birmingham Property Prices by Year||Average Price|
Therefore, I believe the average value of an Erdington property will be £3,150 lower in 12 months’ time than today. That’s not to say Erdington property prices might not dip slightly on the run up to Christmas (in fact they always have done just about every year since the year 2000 and most of those were boom years) .. but in 12 months time this is my considered opinion of where Erdington property values will be.. and looking at the historic prices, even if I (and many other property market commentators) are wrong and they drop 10% from TODAY’S figure .. in the whole scheme of things, we have been through a Credit Crunch, Black Monday and 15% interest rates over the last 20 to 30 years .. and still Erdington house prices have always bounced back.
And Erdington landlords? They have recently been thrashed by Osborne’s tax changes, but yields could rise if Erdington house prices fall/stablise and rents grow, and this might also make it easier to obtain mortgages, as the income would cover more of the interest cost. If prices were to level or come down that could help Erdington landlords add to their portfolio, as rental demand for Erdington property is expected to stay strong as more people find it more and more difficult to obtain mortgages.
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