Unsurprisingly, one of the questions we’ve been asked the most over the last few months is
‘What will happen to mortgage rates post-Brexit?
Like everyone else, we can’t give definitive answers, but we can give you an idea of what we think is likely based on our years of experience as mortgage brokers and analysing the housing market.
Remember though, that everyone’s circumstances are different, so if you want a free chat about your own personal situation, just give us a call or chat online.
Interest rates: Will they rise?
Last November was a bit of a shock for many homeowners when interest rates rose for the first time in a decade. Well, we may all be in for a shock again. Just last month, Mark Carney, Governor of the Bank of England said that an interest rate rise is ‘likely’ this year, but any increases will be gradual. Many experts believe that there will be a 0.25% rate rise later this month, although Carney has said it’s by no means a foregone conclusion. Watch this space.
So, what does this mean for mortgage rates?
Mortgage rates are now at the lowest we have ever seen them, with some deals below 1%. Given interest rates could be on the rise, now would be a good time to fix your rates and lock in your monthly repayments. Some 5 year deals are extremely low, so it would probably be worth taking advantage of them to avoid any future rate rises from Brexit. We don’t know for sure if mortgage rates will go up, but if you can give yourself peace-of-mind for the next 5 years and you won’t be moving property, why wouldn’t you?
What’s going to happen to house prices? Should I buy or put my plans on hold?
We’ve all heard the horror stories of buyers pulling out because they are worried about the “Brexit Effect”, but have they got the right idea? We’re not so sure.
While it’s true that the annual rate of house price growth is at its lowest level for almost five years [Halifax], and house prices in London have fallen by as much as 15% over the past year [Your Move], other areas of the country, especially the North West are flourishing. And even though house prices across Buckinghamshire, Hertfordshire, Berkshire and Bedfordshire are experiencing some of the slowest growth in the country, experts believe that prices won’t go down, but will either stop going up in 2018, or go up by no more than 1%.
For most homeowners, house prices are relevant to each other so if the one you are selling loses a little of its value, so has the one you are buying. Falling prices may have more of an effect on first-time buyers than any other purchaser and they could be in danger of losing money if prices fall. But we think buying your own home is more of a lifestyle choice than an investment choice so, if you want or need to buy, then we suggest you should. In fact, the way house price growth has slowed, could work in your favour as it might make sellers more willing to accept offers well under the asking price. The good news for first-time buyers is that currently, if you buy a property for £300,000 or less, you won’t have to pay any stamp duty.
Brexit has been a bit of a shock for many and nobody can be 100% of its impact on the housing market and mortgage rates. If you would like to talk through your own personal situation, to get a clearer idea of how it might affect you, please give us a call. Most of our clients come from across the Northern Home Counties of Buckinghamshire, Hertfordshire, Bedfordshire and Berkshire but if you live further afield we are also more than happy to help.
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