Will Brexit Affect House Prices?
With Brexit grabbing the headlines for almost two years now but particularly over recent months, we have had more and more people asking the question- Will Brexit affect my house price?
The honest answer to this question is that, along with the rest of the country, we really don’t know whether house prices will be affected following spring this year (if only we had that crystal ball!). However, there are a few factors to bear in mind which you may find reassuring when pondering this question and below are our top three considerations:
1. The Brexit Referendum 2016- When the vote was originally put to the UK to decide whether or not we stayed in the EU, there was so much discussion in the press about the economy crashing and house prices plummeting. In reality, business continued as normal following the vote and in fact, 2016 was a particularly good year for sales at Holmans and we expect 2019 to be the same. Remember that no matter what is happening in politics, homes are essential and there will always be the need for people to buy and sell property in any market, whether that be; first-time buyers, families upsizing, relocation, divorce and unfortunately death.
2. Are you buying and selling?-If you are buying and selling in the same market, then more often than not inflation is irrelevant. Both properties will sell for an amount which is appropriate to the market at the time and therefore you won’t lose out on either your sale or purchase. For example, if you sell your property at the peak of the market, it is likely that you will achieve more than you anticipated, but equally you may find that you are purchasing for slightly more than you expected too. House prices are all relative in the same market, so don’t let the threat of house prices falling put you off finding your dream home this year.
3. Interest rates- Currently, interest rates are very low and have been for some time, it is worthwhile particularly if you are a first-time buyer or investment buyer to make the most of this low-cost finance option. In 1989 the Bank of England base rates exploded to almost 15%, this in comparison to 0.75% in 2018 makes a huge difference of affordability. For example, as a first-time buyer if you were to secure a mortgage for £300,000, paying an average current rate of 2% repayment mortgage over 25 years, then your monthly mortgage payments would be £1,272. However, if interest rates were to rise as they did in 1989 then the same mortgage paying 15% would cost an eye watering three times as much. This may be something to bear in mind if you are considering buying for the first time or purchasing a property for investment.
If you are considering moving home or would just like to understand what your property may be worth, then please do not hesitate to contact our High Street office to arrange a free market appraisal. Alternatively, if you would just like a rough guide to your property valuation, then please use our free Online Valuation Tool, this will give you an estimate in just minutes.
*Please note that all mortgage figures quoted are estimates and should not be taken as advice. If you wish to seek independent mortgage advice, then we would recommend contacting London & Country https://www.landc.co.uk/online/mortgage-finder?icid=1065