Brexit is an abbreviation for British exit referring to the UK’s decision to leave the European Union. This settlement will have significant impacts on the economy, and it has already affected the confidence of most consumers. You are uncertain of how it will impact your housing market and finances in case you plan to reinvest, move, renovate, or buy properties. Brexit is likely to be the primary factor affecting the interest rates, foreign exchange rates, and the UK’s overall economic growth.
Effect on House Prices
Most house buyers and sellers have posed their transactions as they wait for clarity on how Brexit will affect the costs. Currently, the price growth has been obstructed, the deals are decreasing, and the market confidence has lowered. The Brexit referendum didn’t have too much effect on the average UK house prices, and they continued to rise, though more slowly. Most regions continued to experience growth despite the marketing slowing due to the added duty to buyers of second homes and buy to let properties.
The property prices are rising slowly, especially in South and East England, and the prices in 2019 are more stable than those in 2018. After Brexit implementation, the survey says that house prices are expected to fall in most parts apart from Northern England; however, increases are expected in the next 12 months.
The slow falling and rising house prices will be beneficial to most first time buyers and sellers will also have positive benefits. The number of buyers and sellers is not expected to grow in recent years, but if there will be an agreement with the European Union, then more buyers will be more confident.
While buying a house, there is less competition for the property; you can, therefore, do a better background check of the area before purchase.
Effects on Mortgages
Since the property market is slowing down, fewer mortgages have been taken; most lenders are competing for the few clients available. The market has also become more competitive for those who want to borrow a higher proportion of the property’s value. The government may decide to reduce interest rates to encourage growth; however, if prices become a problem, it might increase the rates. If the interest rates rise, then the mortgage rates will go up for those who are not on fixed-rate deals.
You can consider fixing your mortgage for over five years and don’t move during the time, so you will be sure of the amount you are required to pay, irrespective of the likely changes in the mortgage market. You should also determine your living cost and ensure that you can afford them even in the future, just in case your income should reduce.
Effects on Property Renovations
After the Brexit referendum, the pound value fell, and the cost of goods, including building materials, increased, hence adding the total renovation cost. The building experts still expect the cost of equipment and labor to grow despite the slowing inflation. Most homeowners are opting to renovate their houses instead of moving until the precise impacts of Brexit unfold. Despite Brexit uncertainties, homeowners are still doing the renovations. If you want to keep your renovation cost down, considers using cheaper materials, talk to your builder, and ensure that the price doesn’t change with time. Also, borrow renovation money sooner while still, the interest rates are low. Don’t delay your project if you must, because the cost of materials is likely to continue rising.
The range of positive and negative impacts expected from the Brexit is still undetermined; therefore, putting your life on hold will not be a solution. You need to act now and ensure that you protect yourself from potential challenges that you may face in the future. Ensure that you can manage all your ongoing costs, for instance, by keeping on top of your mortgage payment. For the landlords, ensure that you have a great team to fix any property problem, and always invest for the long term, to reduce how much you will be affected by fluctuations in the rental yields. When selling a house, research on the recent property sale, so you can determine how much to expect.