31st October 2019
Property – The Brexit Effect Part 2
This week is part 2 of our blog regarding the Brexit effect. We are looking at both positive and negative opinions in the Industry and exploring the effects on housing prices. housing stock and buyers thoughts on buying. Though we do recognise that the latest delay might make a difference!
The Brexit Effect on house prices
Don’t just jump straight into a long term fixed rate mortgage if you are re-mortgaging rather than selling. The political situation may be in turmoil but it is important not to panic and make rash decisions. Putting your life on hold for an unknown doesn’t make good sense. Recent price drops in some regions mean that it’s becoming more of a buyers’ market, so you might be able to get a good deal. Besides, buying a property should generally be regarded as a long-term investment. Even if there is a short-term price drop, house prices will probably stabilise in the future. Basically if you want to live there – buy now! We are happy to help.
Recent research from accountancy firm KPMG suggests UK house prices could fall by more than 5% if there’s a no-deal Brexit. This won’t help consumer confidence. Once the current political impasse is resolved and it’s clear how and when we’ll be leaving the EU, we hope there will be a degree of certainty which may trigger a flurry of activity. We hope this certainty is provided sooner rather than later. Don’t forget that house prices almost always recover. Housing should always be considered a long term investment.
The Brexit Effect on housing stock
Buyers have held back in the hope that prices will fall. However this hasn’t materialised across the board so they are starting to come back into the market. ‘The difficulty now is the lack of properties for sale. People are worried they won’t get a good price for their property at the moment so are holding back from marketing. Estate Agents locally are reporting an increase in buyer activity since Brexit was once again delayed but vendors are still sitting tight. Buyers are actually thinking carefully before making decisions and are holding back due to fear of a price reduction. All leading to a stalemate in many cases!
The Brexit Effect Buy To Let
In terms of buy-to-let, demand from landlords has already reduced and many have sold up. We are now seeing rent rises as a result – particularly since the tenant fee ban. Sadly this has impacted tenants more than agents or landlords. This means that with property deals available and rents on the rise, now isn’t a bad time to be a landlord. Make sure you really understand your objectives and whether the deal stacks up both now and in the long run. Speak to a Broker for tailored advice on what is right for you. We specialise on buy to let mortgages particularly the complex and are here to help.
It is likely that landlords with established, well-capitalised portfolios will fare reasonably well. However, those heavily reliant on finance may find uncertain conditions more troubling.
The Brexit Effect on New Build
Unlike the wider housing market, where transactions have dropped considerably from the historical norm, the new-build market has remained relatively strong in recent months. The confirmation in the Budget of an extension to the Help to Buy scheme was welcome. The scheme is ensuring demand for new-build homes remains strong. This certainty of demand is enabling builders to plan ahead to increase output in the coming years. This is demonstrated by the record high number of planning permissions being granted. However to enable increases to be delivered the industry needs certainty about future labour supply. It is essential that, post-Brexit, the building industry continues to be able to access skilled labour from abroad if housing targets are to be met.
A long read but then lots of thoughts and opinions. If you feel you would like clarification on anything we have mentioned please don’t hesitate to call us. And try to see the bigger picture – if you need to move the time is always right.