What does brexit mean for UK property?

padington

the_flying_pig wrote: »

https://twitter.com/JohnMoylanBBC/status/746322649186451456?ref_src=twsrc%5Etfw

They'll be bored as hell in Frankfurt and if they don't drink, pretty damn bored in Dublin too.

Good luck to them, crap credit cards anyway.

AG47

Even the perma prop Bulls are now bearing on uk property

MiserlyMartin

the_flying_pig wrote: »

https://twitter.com/JohnMoylanBBC/status/746322649186451456?ref_src=twsrc%5Etfw

It amazes me that morons like John Moylan ever got a job at the BBC. Oh hang on its the BBC - they get EU funds no wonder they have been and continue to be even now, totally biased

BobQ

cells wrote: »

its not certain yet what an exit will look like. If the UK leaves the EU but keeps free movement free trade and the membership fee what will change?

We will then be in Fantasyland........

Crashy_Time

BobQ wrote: »

We will then be in Fantasyland........

And many many Tory mp`s will lose their seats.

chucknorris

AG47 wrote: »

Even the perma prop Bulls are now bearing on uk property

It appears that you have been lying:

https://forums.moneysavingexpert.com/discussion/comment/70893059#Comment_70893059

economic

chuck - do you think you should have sold given the brexit result?

chucknorris

economic wrote: »

chuck - do you think you should have sold given the brexit result?

No, for a number of reasons:

The properties are still substantially more profitable than any alternative, collectively we would have to pay about £800k in CGT, which means that prior to selling we are earning a return on that £800k.

Although our mortgages are quite low (about 13-14% LTV) because they are low margin trackers they still assist in creating higher profits.

I am more focused on rental income than capital growth, and our gross rental income is about £140k which I am happy with. I am not expecting any 'real term' capital growth going forward.

But as you know in recent years I have been talking about selling (at least some), the trigger for that would be, my age (I'm not getting any younger), interest rate rises. I might well sell before they rise, if I believe rises happening not so far off, that in fact, is my strongest argument for selling very soon.

I think my decision to sell (some) property when the base rate gets to about 2-2.25% is a sound one, and right now I am sticking to that. But I will occasionally review the situation, I want to be flexible and pragmatic (not dogmatic). It is a big decision that shouldn't be taken lightly.

EDIT: I nearly forgot to add we are selling one property, my mother in law used to live in my wife's house, sadly she passed away a few months ago. My wife will be selling this house very soon, it is the most expensive one that we own, valued at about £1m. This property has never been rented out, and we don't want the hassle of letting it.

economic

chucknorris wrote: »

No, for a number of reasons:

The properties are still substantially more profitable than any alternative, collectively we would have to pay about £800k in CGT, which means that prior to selling we are earning a return on that £800k.

Although our mortgages are quite low (about 13-14% LTV) because they are low margin trackers they still assist in creating higher profits.

I am more focused on rental income than capital growth, and our gross rental income is about £140k which I am happy with. I am not expecting any 'real term' capital growth going forward.

But as you know in recent years I have been talking about selling (at least some), the trigger for that would be, my age (I'm not getting any younger), interest rate rises. I might well sell before they rise, if I believe rises happening not so far off, that in fact, is my strongest argument for selling very soon.

I think my decision to sell (some) property when the base rate gets to about 2-2.25% is a sound one, and right now I am sticking to that. But I will occasionally review the situation, I want to be flexible and pragmatic (not dogmatic). It is a big decision that shouldn't be taken lightly.

EDIT: I nearly forgot to add we are selling one property, my mother in law used to live in my wife's house, sadly she passed away a few months ago. My wife will be selling this house very soon, it is the most expensive one that we own, valued at about £1m. This property has never been rented out, and we don't want the hassle of letting it.

yes i think all this makes sense. no doubt you will see a lot of nervousness now in the market however it remains to be seen if big price drops will occur. certainly dont see price rises in the near term. still the underlying factor is limtied supply in areas like london against a backdrop of a lot of uncertainty, possible recession etc. very difficult to tell what will happen with any degree of confidence.

Garethgrew

mwpt wrote: »

I'm speaking specifically from a London context. The rest of the UK I don't know much about.

I think the Pound has more to fall over the next year or two. Short term volatility up or down but trend is down. I don't think this will prompt the government to increase rates. They were happy to sit on a 20+% fall in 2008. I feel they may try one last swing of the bat with lower interest rates in fact. I don't know what will happen with immigration but if the economy tanks even more and job losses start piling up, I guess brexiters will get their desire as people will stop wanting to move here. So immigration may fall a bit from EU but increase from non EU. Again, a government isn't going to want to make a recession worse so don't see this changing much.

What will the government do about a potential recession? Whoever the leadership ends up being, we know every government has a precedent for using house prices as a tool to stoke the economy.

So, interest rates potentially down (makes mortgages cheaper), Pound severely devalued (makes London property cheaper for external investors), immigration not much different. These are all upward pressure on house prices in local currency.

But sentiment is the big unknown. Do people want to bet on increasing house prices when they don't know which direction the country or economy will be heading?

So basically, some upward pressure and some potential downward pressure. I can't quite predict.

Guess: Short term, outward to six months, prices down. Once rates are cut, money printed, Pound devalued, upward pressure again.

Interest rates will have to go back up to stop the pound falling any more, this is bearish for property