Cautious buyers/sellers – the house market’s New Normal
To begin with the leave date was 31st March 2019, three years after voting to leave the EU. This was delayed. Next an extension was requested by former Prime Minister Theresa May to April 12th, which was later pushed back to October 31st this year. Now with a new leader, who knows what will happen to Britain once this date has passed. While uncertainty remains, the economy is in a state of flux and the property market is no different. This is the one of the reasons why statistics show little activity across this investment sector.
While less are buying properties ( 86,630 in July – a 12% decrease compared to last year), prices have steadily increased in value by the shortest margin, according to recent reports from one of the UK’s biggest lenders. The Halifax, part of Lloyds Banking Group, said that prices rose by 0.1% in June to August, compared with the previous three months. Brexit remains a curious subject and the public know little of the outcome, doubts will remain – even if the UK doesn’t. Will the property sector drastically change when Britain does leave the EU? Whether you’re a first time buyer, looking to swap homes or own multiple properties as a landlord, transactions will always take place. You just have to decide whether you can afford the mortgage payments consistently. Since Britain decided to leave the EU, there’s actually been better deals on the cards for buyers, with two and five year fixed-rate mortgages available at a lower cost, according to reports from which a high number of mortgages are still being accepted.
Halifax also stated that the market was still “resilient”, even with this doubts about investing in properties. Despite the worst economic recession expected in 12 years, the price of the average UK home is valued at £233,541 and prices rose again in August to 0.3% compared with July. While prices remain higher month to month this year, a lack of properties to meet the demand of buyers is a cause for concern among the property sector. Higher competition means higher prices, so it’s a matter of what you can afford. Buying a property always brings risk with it, no matter your situation. As a seller, you have a different dilemma. Do you stick or twist? If you stick with your house now the value could drop significantly after Brexit, or twist and take a gamble, which could pay off depending on how the value changes. There’s really no set rule on what will happen with the market.
When you factor in all the considerations; government unrest, statistical data and general uncertainty among the population of around 66 million, there’s no wonder many are turning to renting properties, a much safer bet which offers lower risk while we question every decision and financial headline that trends on social media. Different predictions have been suggested, with housing prices decreasing after Brexit, with the Bank of England believing there could be a 30% drop in value. Job security, whether you can afford a minimum 5% deposit on a long-term mortgage and up front costs such as stamp duty could all affect buyers. You also have to factor in maintenance and repairs costs, plus you have less flexibility if there’s major housing work that needs doing. While the majority remains cautious buying and selling (and figures back it up), renting may be your best option right now for peace of mind.