Should I buy a home before Brexit?

6th March 2019

 

With March at our door, it’s Brexit crunch time and, like the rest of us, you’re likely questioning how this may affect you and your future plans.

If purchasing your first home or moving into a bigger property is part of those plans, you might be asking yourself if you should buy a home before Brexit or wait to see what happens after?

There are many speculations as to what will happen once we leave Europe but nobody knows what will definitively happen to the UK economy or housing market so, unfortunately, there is no simple answer to buy a home before Brexit or not. To help guide you in answering the question of if you should buy a home before Brexit though, we’ve listed the facts and what we do know for you.

 

Houses are still being purchased

HMRC’s property transaction statistics showed in December 2018, 103,240 residential properties were sold across the UK. Compared to the previous year (106,330 residential homes sold) that’s a fall of 2.9%. There are many factors that may have contributed to the fall, including buyers being hesitant regarding purchasing a house before Brexit, however, it does not suggest that everything is coming to a standstill.

The full property transaction statistic report can be read here.

 

House prices have fallen

According to Halifax, the average UK house price fell from December 2018 to January 2019, bringing the average house price down to £223,691. This is the biggest monthly price drop since April 2017. The biggest area affected by the price drop in London, with some parts of the south-east close behind. With this in mind, it may be a great opportunity for first-time buyers to get on the property ladder.

 

Increase in interest rate in Aug 2018

Back in August 2018, the Bank of England rose the interest rate from 0.5% to 0.75%. This meant that those who had been, or are currently on, a tracker mortgage (where the loan interest raises and decreases with the base rate) saw their monthly mortgage repayment go up slightly. However, this had worked out favourably for those saving for a deposit.

 

Equity loan changes

From March 2021, the current Help to Buy Equity loan scheme will be ending and a new scheme will be introduced that will run up until 2023. The new scheme will only be available to first-time buyers (previously if you could become a first-buyer again if you haven’t been an owner in a primary residence for at least 3 years leading purchase) and introduce new regional price caps. Prices will be capped at 1.5 times the current average first-time buyer price in each region with a maximum of £600,000 set in London, £437600 in the South East and £182,100 in the North East. This means if your looking to purchase a property outside London, the amount you can borrow from the government may be reduced to match the area’s average house price so it is best to benefit from the scheme before April 2021.

 


 

These facts are correct at the time of writing. If you’re unsure whether you should buy a home before Brexit or after, speaking to our expert mortgage adviser may be helpful.

 

All content is accurate at the time of publication

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