I have no interest in politics whatsoever, but what I do have an interest in is how the results of the EU referendum will affect myself & my loved ones.
One of the main things that I thought of (& worried about!) when the results came in the UK would be leaving the EU was the effect on homeowners. The uncertainty of what’s to come has left many people unsure about what to do if they were considering buying or selling their home.
SO, I’ve been doing a bit of research to try to put everything into perspective for those that already own or are thinking of getting onto the property ladder in the UK.
First time buyers –
If have been considering taking the first step into becoming a home owner then no doubt you are anxious about potential problems that the results have thrown up.
However, now may be the best time to buy considering experts have envisaged that interest rates may fall, meaning lower mortgage/loan rates plus property prices may dip. This may mean however that less people decide to sell up & move so fewer properties will come onto the market.
Lenders may start to become wary so make sure you’ve saved up a minimum of a 5% deposit to secure yourself.
When taking out a mortgage, it’s important to consider that the government are planning to be out of the EU within 2 years, which is a typical mortgage length. This will mean that in 2 years time, companies may be wary of lending money so for peace of mind it may be better to tie in for a longer deal such as a 5 or even 10 year mortgage meaning that your rate will stay the same throughout any recession we may enter.
If you chose to lock in with a fixed rate mortgage, it’ll mean financial security, however you will lose flexibility so if the interest rates drop more then you’ll still be paying a higher premium.
In the 80’s, interest rates shot up & home owners mortgages went up to a whopping 15%, this is something I personally am petrified of as it would mean my modest mortgage of £170k against our £575k property would rise from £750 PCM to a crazy £2,150 PCM. This would mean the majority of people would lose their houses.
A lot of people are in a state of confusion at the moment which means that the property market has slowed down somewhat. This may mean that until the Government lays out clear plans, many people will be staying put. What will it mean for those wanting to sell? Houses may take longer to sell & you may not get the price you were hoping for.
That being said, in the UK we have a large demand to supply deficit so this will always be in your favour.
If you are thinking of selling your current house & buying somewhere else then you’ll have to consider the above points. Many are choosing to wait until things are clearer.
Are you worried about how Brexit is going to affect your home?
Love, Charlotte x