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21st August 2019

First Time Buy – Before or After Brexit?

If there’s one thing that’s absolutely certain about Brexit, is that it has made everything feel very UNcertain, regardless of whether you voted Leave or Remain. House prices are one casualty of this. Current statistics indicate that the average house  has dropped 5% in value, perhaps even more in the South.

So if you’re a first-time buyer, what should you do? Is it wiser to wait until Brexit has come and gone, or take advantage of attractive mortgage rates today?

The key thing to bear in mind for first time buyers is that you are looking to secure a home rather than an investment. This is particularly important in these volatile times. Regardless of what happens, the property market is relatively resilient. As long as you’re not looking to buy and then turn the property over immediately, selling for profit,  houses tend to weather bumps in the road.


The case to buy before Brexit

Brexit uncertainty is keeping mortgage rates low, which means home-ownership is the most cost-effective it’s been in recent years. Low interest rates (the Bank of England raised the base rate from 0.5 to 0.75) are also appealing to first time buyers. Buyers who have secured great mortgage rates are locking them in using five-year fixed-rate deals. This offers stability in times of uncertainty. And the mortgage payments are often less than the cost of renting.

Many buyers are taking this course of action. They are looking to buy BEFORE Brexit taking advantage of low interest rates and lock them down to ride out the Brexit storm. Mortgages might be harder to get post-Brexit too which may be an important consideration for some and outweigh the chance that prices might continue to fall.

Here at The Finance Roome we think that a crystal ball would be useful!

It has been noticeable in the last few months that property prices in usually busy parts of England have tailed off somewhat with prices flattening out. In some areas they are going down. Mortgage rates however, remain historically low, with some very good rates available. This is particularly so if first time buyers have a  healthy deposit of 15% or more.

There is also a potential for interest rates to increase post-Brexit if the final deal is not taken positively overall or if no deal is reached. Property prices could decrease further, particularly if we end up with a No Deal. Properties, like investment markets, tend to go through periods of repricing anyhow. What has been happening may just be a natural course for prices to take rather than being Brexit related. However,  interest rates are low and prices seem to be levelling out. Perhaps first time buyers should not wait any longer to buy? If they’re in a position to do so.

The case to buy after Brexit

Last month Bank of England governor Mark Carney said a No-Deal Brexit could result in house prices falling by up to 35 percent, and we’ve already witnessed house prices sliding south by £5k. Who’s to say there won’t be even more of a slide once Britain has firmly and resolutely left the EU?

Some buyers, despite the extortionate cost of renting, are opting to wait Brexit out. Buying a house next year makes more sense for their long term plans. Not only might lower prices be pivotal but the market itself may well steady itself, becoming less volatile.

While this could seem like good news for first-time buyers, the worry of a drop in prices could leave many sellers putting off listing their home for sale until after Brexit exit. Meaning that some pre-Brexit buyers might get a small price discount and fixed interest rate but there could be less stock. Less stock of course means less choice!  Post Brexit there may be a flood of homes coming to the market as people feel more secure and this long period of uncertainty finally comes to an end.

How we can help

So what do we think? The only informed advice we can possibly give is to remind first time buyers that this is going to be home. Look at where you  want to live for the next five years. Then base your decision on whether or not the house YOU want is  available now, at a price you can afford. If not, then wait. And make sure you get the best possible mortgage advice – and there we CAN help. Call us on 01242 226353 or email You might be surprised at what is actually possible!


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