An area that some people might not have considered to be affected by Brexit is the UK property market.
For October, The Rightmove House Price index failed to show the traditional ‘Autumn bounce’ this year. Generally speaking, in September to October there is a flurry of activity as people want to sell their property before the Christmas period. However, for this year it seems that buyers have opted for a wait and see approach.
This has led to 13.5% fewer properties being listed than in the same period in 2018. The average asking price went up by only 0.6%, compared to an average rise of 1.6% in October over the previous 10 years.
Even though thousands of potential sellers are waiting to see what will happen, the number of property sales has been almost the same compared to the same period last year. This indicates that any buyers who have decided to move are committed to getting the deal done, as such more sales are being completed than normal.
Below are some considerations to take when navigating the housing market to minimise the effects of Brexit:
First time buyers:
Brexit has meant there is unpredictability in the market, meaning interest rates are unlikely to rise and could potentially fall. This could be favourable to first time buyers as they could take out a mortgage whilst interest rates are low. Fixed term mortgages could also be a good option so that repayments are kept at the low rate of interest.
The perks of buying a new build property is that you can use the government’s Help to Buy scheme to get you on the property ladder with a relatively small deposit. However, new builds tend to come at a property price premium, which could become an issue if house prices drop and you end up in negative equity and then want to sell your property.
Once in a new home, don’t move:
Once you have moved into a new home it is generally a good idea to stay put for a number of years. This is because moving is expensive and house prices could fluctuate in the near future. Therefore, find a house that you really like and one that you can see yourself living in for a number of years.
Buying a property at an auction
Buying at auctions allows you to avoid the complications of a long property chain. As long as you have the ability to pay for the 10% deposit at the end of the auction this could be a good way to get a quick purchase.
If you are looking for more help and guidance, get in touch with us on 01609 760960. Or arrange a call back and one of our financial advisers will be happy to help.
Reference – BL085 – Dec – 19