With the united kingdom set to exit europe in under three months, homebuyers across the nation are asking one big question: must i wait to determine what goes on or take the plunge now?
Whether you’re a first-time buyer looking to get around the ladder, or perhaps a home mover waiting to exchange contracts, it’s perfectly reasonable to become struggling with an instance of Brexit jitters.
But the truth is that nobody definitively knows what will happen to the economy or indeed the property market over the next few months.
Here, we take a look at the choices available to homebuyers because the clock ticks right down to 29 March.
Buying before Brexit: the big questions
Are house prices going to crash?
Talk of a property market meltdown makes for good newspaper headlines, however in truth there’s no indication an accident is on its way. In fact, housing prices are still rising, just more slowly compared to what they were in the past.
Indeed, data in the ONS House Price Index released the 2009 week showed prices increased by 2.8% year-on-year in November.
But what will happen later in 2022? Rics (the Royal Institution of Chartered Surveyors) predicts that house prices will hold steady this season, even though it says London and the East may see a small drop. Other property experts predict moderate increases or no change.
So as the property market seems to have reached no more the blockbuster growth seen in many areas over the last decade, it’s highly unlikely that prices will crash in 2022.
Are people still buying and selling houses?
While activity on the market has slowed, there’s evidence that deals are still going through.
HMRC transaction data from November (December’s figures will be released in a few days) shows that 100,930 properties were sold throughout the month, compared with 101,410 a year earlier. That’s a fall of less than half a per cent, suggesting the market is hardly grinding to some halt.
It’s impossible to state what might happen within the next few months, although it is feasible that the ‘no deal’ Brexit or extension of Article 50 could cause transactions slowing further, as consumers opt to stay put.
Ultimately, though, a substantial slowdown seems unlikely.
Is it a buyer’s market?
Property markets are hyper-local, so while national information is useful like a snapshot, you need to focus your research on the area you’re looking to purchase a house.
While a slower market could theoretically allow buyers to negotiate a better deal, fewer listings can mean greater competition for that highest quality and many sought-after homes. And with competition comes higher prices.
As ever, do your research and don’t rush in at the first manifestation of a bargain – if it seems too best to be true, it probably is.
Buying before Brexit: should I get it done?
Second steppers and residential movers
Buying before Brexit: mortgage implications
Cheap home loan rates may tempt you to definitely buy before Brexit, particularly if you only have a small deposit.
Despite two increases staying with you of England base rate, fixed and variable deals remain attractively priced, but for just how long? You will find signs the only way expires, with the prospect of further base rate increases and lenders prone to pass any higher charges they face onto borrowers.
If you are thinking of getting a home loan now, you’ll need to make a judgment call between flexibility (like a two-year fix or discount mortgage) and security (that could be offered with a longer fix for five, seven or 10 years).
The right decision is determined by your own circumstances and just how long you plan to live in the home. For example, a two-year fix enables you to look around for any new deal after 1 . 5 years, while a five-year fix protects you against rate rises but hits you with early repayment charges if you choose to move.
In most cases, mortgage are actually more affordable – but cheap home loan rates alone aren’t a reason to rush out and purchase a home.