Wondering how Brexit will effect house prices? Our IFA, Clifford Osborne, gives an outlook for residential property and offers advice to those looking to purchase in the near future…
THE OUTLOOK FOR RESIDENTIAL PROPERTY
Prior to the EU referendum, the London property market had shown some signs of cooling down. With the capital, most likely to feel the immediate effects of Brexit this doesn’t come as too much of a surprise; before the vote there was strong evidence that prices had been moderating. New listings were outpacing sales even before 23 June.
A TWO-SPEED MARKET
Outside London, residential property researcher Hometrack report that house price growth and recent sales momentum in regional cities has held up well. They conclude that the London market faces further headwinds as more supply and fewer sales are likely to reduce the growth in house prices in the months ahead.
In the 12 days after the EU referendum, property researcher, LonRes, reported that the number of cuts to London house prices soared by 163% as against the 12 days before the vote.
A recent survey by the Royal Institution of Chartered Surveyors3 indicates that 12-month price and sales projections are edging back into positive territory. It is also evident that the shortage of property for sale is providing some underpinning for prices.
As usual wide regional variations are evident. With few hard facts to go on at present, no-one knows for sure what effects Brexit will have, or indeed how long it will take for the UK to complete its withdrawal from the EU. At present, lenders continue to be lending as normal, but volumes may decline if consumer confidence in the economy falls.
Any fall in prices will be encouraging news for first-time buyers who have long felt priced out of the market.
GUIDANCE FOR WOULD-BE BUYERS
You are looking to buy a home that you intend to live in for many years, and you feel sure that you can comfortably afford the repayments, even if interest rates were to rise at some point in the future, then you are less likely to be affected by short-term market movements.
With interest rates low, and lenders offering very competitive mortgage deals, this could be the right solution for your housing needs. The best course of action, whether you are a first-time buyer, second-stepper, or looking to enter the buy-to-let market, is to consult your mortgage adviser.
Clifford Osborne are independent mortgage advisers based in Eastbourne, East Sussex. We serve clients in Tunbridge Wells, Brighton, Lewes, Uckfield, Hastings, Bexhill, Seaford, Newhaven and further afield. Please contact us for more information or to book your free initial review.
