No one can predict the future, and that’s exactly the reason we’ve avoided trying to give advice like this on the site. However, with the news that 55% of first time buyers ready with a deposit are waiting until after Brexit, we felt like it was time to share a little of our knowledge.
Brexit is an unknown, and it is making both buyers and sellers a little edgy. Will prices drop? Will properties increase in value? Will we find that we could have gotten a better deal?
We’ll be keeping an eye on the discussion in parliament this evening about the Brexit deal, but so far we’ve been considering who might benefit from this period of uncertainty, and whether it’s a good time to buy for anyone.
Here are some of the top Brexit property concerns, and our responses:
Is now a good time to buy?
This obviously depends on regions and what kind of property you’re looking for (as well as how long you’re planning to stay in your home), but if you’re a first time buyer with a deposit ready, you’ll find there have been some significant discounts to properties since Christmas.
Properties that have been on the market for a while are likely to have sellers willing to drop their prices for a quicker sale, meaning you could get a great deal. Remember that if it’s below £300,000 you’ll pay no Stamp Duty
as a first time buyer, or if it’s under £500,000 it will be reduced.
For many places around the UK, it is most definitely a buyer’s market, and if you find a brilliant home at a great price, you’re unlikely to find it drops much cheaper.
Mortgage deals are currently becoming more competitive for 95% mortgages and first time buyers. There’s also been the recent softening on limits for first time buyers, with talk of 100% mortgages making a come back, and the extension of the 4.5 times your income being extended for those in certain careers.
Mortgage terms have also been lengthening, with 30 year and even 35 year mortgages available, making monthly repayments more affordable for first time buyers. Choosing a mortgage with a great deal that will tie in your repayments for a few years gives you some breathing space and a chance to plan your next move.
If there are excellent mortgage options available to you, for a great price and offering some security, it might mean it’s the right time to buy for you.
Negative equity is when you’ve paid more for your property than it is worth – this could be one of the main fears of potential buyers during the run up to Brexit. What if you buy a property with a mortgage, and then find yourself stuck paying it back and unable to sell it because it has decreased in value?
Negative equity is really only an issue if you intend to sell your property soon after you buy it. If you are buying a property as a home rather than an immediate investment, you are likely to move out of negative equity as the market recovers. Whilst it can be upsetting to think you have overpaid for your property, it is a long term process and the market is often cyclical.
If you are planning on staying in your home for more than five years, you don’t really need to focus too much on negative equity, especially if you’ve found a property and a price you’re happy with. If you’re planning on buying and selling soon after, then perhaps now is not the time to buy in case you get stuck with a property you can only sell at a loss.
Will it be cheaper later?
It’s hard to tell whether property prices will go up or down. Mark Carney
sent people’s minds racing last year when he suggested a 30% drop in prices, but this was simply a test the Bank of England were doing in order to remain rigorous. More recently, estate agents, RICS and mortgage providers all predict minimal growth
in the coming year, but growth nonetheless.
Why not now?
It’s completely fair to be concerned, as so much of the news about Brexit is confusing and contradictory. However, at the moment it is all speculation. If you’re waiting on buying your dream home because you think you might get a better deal, you may lose out further down the line.
At the moment, with so many properties on the market getting little attention, you really do have the chance at getting a bargain. Whilst everyone else is holding out, you can make the most of the indecision.
If you are planning on buying a long term family home, and you’ve found a property offering great value for money, it seems unnecessary to wait along with everyone else. Remember that a property is only worth what someone will pay for it.