We are all watching the impact of Brexit on the housing market and of course we want to know what will happen to house prices now Britain has voted to leave the EU...
Drop in Housing Supply?
Firstly, the UK has seen a sharp drop in property supply, although a survey by The Royal Institute of Chartered Surveyors (RIC) says this began several months before the EU referendum. The RIC report that 45% of surveyors saw a fall rather than increase in people putting their homes on the market during June - the sharpest fall they have seen since they started surveying in 1998. RIC’s chief economist Simon Rubinsohn said:
“Big events such as elections typically do unsettle markets, so it is no surprise that the EU referendum has been associated with a downturn in events. However, even without the build-up to the vote and subsequent decision in favour of Brexit, it is likely the housing numbers would have slowed during the second quarter of the year.”
Dip in House Prices?
The RIC’s survey also suggested there is likely to be a dip in house prices over the next three months, however this is reported as being unlikely to persist anywhere other than London and East Anglia next year. The full extent of the effect of Brexit on house prices is obviously unknown, however although any fall in price is bad news for property owners and investors, it could help many first time buyers who may see this an opportunity to get on the first rung of the ladder - so we'll all be watching how things develop.
Changes to Stamp Duty Ahead?
There are other possible financial implications for homebuyers which could come into play, for example, Richard Buxton, chief executive of Old Mutual Global Investors (OMGI) predicted one of the steps the UK could take to compensate for the fall in the pound would be to cut stamp duty.
Time to Remortgage?
With the UK in a period of economic instability, those thinking about buying and selling property are understandably proceeding with caution while things settle down. However with interest rates staying low, it’s a great time to remortgage and there are plenty of deals to be had by first time buyers who will also benefit from lower rates.
For any advice on mortgages, come and speak to a mortgage adviser from The Mortgage Hut. Pop into one of our branches in Southampton, Eastleigh, Winchester, Basingstoke, Newbury and Andover or give us a call.
Sources:BBC News: Brexit ‘will be horrible for the UK economy’ - fund manager