what the numbers and the experts are saying
Political flux continues to create enormous uncertainty in the UK housing market. Here’s a brief look at what the numbers and the experts are saying about house prices before and beyond Brexit.
Thanks to house price indices and transaction statistics, it’s easy to see how unsettled the property market has been in recent years:
According to accountancy firm KPMG, average house prices in the UK are likely to experience a nationwide decline of about 6% in 2020 – with a drop of 10-20% possible. But real estate experts suggest that a potential post-Brexit price crash shouldn’t stand in the way of buyers looking for long-term property.
While short-term turnovers should be approached with caution, homeowners planning to stay put for the next five years or so are unlikely to be affected by temporary price fluctuations. Recent price drops in some areas are even creating a slight buyer’s market.
Unlike the general housing market, property development companies claim the new-build sector is holding strong and steady. In fact, with the Help to Buy program supporting the demand for newly built homes, there’s been a significant increase in planning permissions. The biggest question seems to be whether easy access to skilled labour from abroad will continue, post-Brexit.
With rents rising – possibly in response to this year’s tenant fee ban – and many landlords rethinking their positions, there are some decent UK buy to let deals to be had. The key, say industry experts, is to pin down your long-term goals and take Brexit-related caveats like these into account:
It’s important to budget carefully and confirm that your ongoing ability to support a buy to let mortgage is secure before considering any property finance investment.
Mortgage brokers are advising that, despite attractively low mortgage and bridge loan rates, property buyers should resist heat-of-the-moment decisions they may regret later.
Rather than leaping into a fixed mortgage rate to achieve financial security, for example, it’s best to explore flexible options that will allow you to remortgage if rates change – especially in light of rumours supporting a base rate cut before the end of the year.