What does Brexit mean for house buyers and sellers?
by Alexander Beard Group, on Dec 16, 2019 12:31:25 PM
While you may be heartily fed up of the word, Brexit has unfortunately had a major impact on the UK property market. What has it meant for buyers and sellers? What might the best course of action be now?
The Rightmove House Price index in October showed that the traditional ‘Autumn bounce’ or increase in activity failed to occur this year. This usually happens in September or October because people are eager to complete their sale before Christmas but this year, many buyers and sellers opted for a ‘do nothing’ approach.
This resulted in 13.5 per cent fewer properties being listed than in the same period the previous year. Average asking prices went up by just 0.6 per cent compared with an average rise of 1.6 per cent in the month of October over the previous ten years.
Interestingly though, although thousands of potential sellers are holding back, the number of sales agreed has been almost the same when compared with the same period a year ago. It seems that those buyers who do decide to move are committed to making it happen, so more sales are being completed than is the norm.
In order to minimise any further impact Brexit may have on your plans to move house, consider the following points:
Brexit has meant unpredictability, which may have an adverse effect on interest rates. If possible, first time buyers should try and take out a mortgage while interest rates are still low. Fixed term mortgages could be a good option so that repayments are Brexit proof for some time.
New build v.s old home?
The advantage of buying a new build through a government scheme such as Help to Buy is that it helps you get on the property ladder with a small deposit. New builds do come at a property price premium, though, which could land you in negative equity if prices dropped suddenly after Brexit. At the moment, an older home is considered a safer investment.
Once in your new home, stay put
Brexit or no Brexit, this is a good strategy. Moving in itself is expensive and house prices are likely to fluctuate so find a house you really like and that you will be happy to stay in for a good number of years.
Already a homeowner?
Now could be a sensible time to move if you already own your own home, especially if you’re planning to move to London or the South East. Prices there have dropped by as much as five per cent, so provided houses are selling in your own area, it could be an opportunity to buy a property that you’d previously considered out of your price range.
Buying at auction
The advantage of this in these current times is that you have the guarantee of a quick purchase without getting embroiled in a long property chain. As long as you can afford the ten per cent deposit as soon as the auction closes, it could be an option worth exploring.