With the Brexit deadline looming faster and faster, and a second referendum appearing to be out of the picture, the pressure to decide whether or not to buy a home before Brexit is increasing. The future is unknown for every single person and with the government not deciding on a deal yet – or even a no-deal – people are even more uncertain about buying a house. If you’re unsure of whether to take the plunge or risk the future, then keep reading on.
After the results of the Brexit referendum were called out, mortgage rates began to plummet. They continued to degrade further until the lowest they had been for years. Low mortgage rates seems great, especially for first-time buyers. However, low mortgage rates have led to an increase in house pricing and a competitive marketplace. So, in the end, you result in purchasing your home for a lot higher than you intended, or even past what your budget allows. Real estate agents will do anything they can to persuade you to buy the house now, rather than risk losing you as a customer. Therefore, they will say a lot of scare-mongering things like you should buy now while the mortgage rates are still low. This could make anyone panic and neglect to actually focus on if they can afford this house right now.
However, real estate agents aren’t exactly lying when they say low mortgage rates won’t stay low forever. If you look at the way that mortgage rates are trending now, you can notice that the numbers have slowly began to crawl their way back up again. With Brexit so close now, and with the possibility of a no-deal scenario rising with each passing day, no one can predict if mortgage rates will climb higher or drop back down again. So, if you’re more interested in low mortgage rates over the cost of your house, then buying before Brexit starts is the way to go.
Renting your first property can be challenging at any time, but while we’re in a market where demand far outweighs capacity, you need to get clued up before you hit the streets looking for your first home to make sure you get the property you want first time. Read more
If you want to focus on buying a house over the percentage of mortgage rates, though, especially since they’re prone to fluctuations, then buying after Brexit is the better option for you. If Britain decides on a no deal agreement – or perhaps maybe even a hard Brexit – then housing prices in the United Kingdom will most likely fall dramatically. Be warned, however, as although this seems great at first for those wanting to buy, it’s important to remember the other side of the market place – the sellers. Sellers won’t want to part with their house if it’s worth less than what they originally purchased it for. This will especially be the case if they bought it during the period of 2016, where prices rose dramatically due to the Brexit referendum’s Leave result. This will result with less houses available on the marketplace, which inevitably will make it difficult to get on the property ladder. The low prices will also attract loads of customers, which will make the demand greater than the supply, resulting in tons of competition. You may end up purchasing your house for a lot more than you originally thought and again might go past your budget. Only this time mortgage rates will most likely be higher too, meaning paying it back will be more difficult. It’s also worth noting that if your job is threatened by Brexit, then this may be the worse time for you to buy a house. However, if your career is most likely to be Brexit-proof, and you can afford to spend a little more over your budget, then buying post-Brexit is definitely worth taking a chance on.
If you meet all the criteria above, then the only issue left with buying post-Brexit is if you plan to resell straight away, rather than live in your house for a few years. You most likely won’t make as high a profit as you had hoped. However, due to the demand still being less than supply, you may be able to negotiate a higher price if your bargaining skills are up to scratch. Make sure the house is in good, working order too, so that you can really afford to raise the cost.
In the end, the property market is resilient and will bounce back from whatever Brexit may bring. Housing recovered from the property market crisis in 2008 and will continue to do so. There will always be something warning about property market doom and gloom. So ultimately, if you’re really unsure what to do, then go for it when you can afford it. Purchasing a house is a big step for most people in life and the future really is uncertain. Therefore, if you have your eyes set on a house, see if you can afford it and enjoy your new home.