Brexit & Mortgages

surfer9

When are we likely to see any changes to interest rates or house prices?

From a little bit of searching, I believe interest rates are going to be reviewed again in mid-July. Many saying interest rates will go down, though some saying they may go up?

Assuming they go up or down, will it have an immediate affect on house prices?

I am waffling on.....but basically I am a 1st time buyer and I have always wanted to get on the property ladder and am wondering if this Brexit situation is likely going to help me out and make it easier to buy a property.

There is a property that I am interested in right now, though would it be sensible for me as a FTB to buy now when houses could potentially get a lot cheaper for me in coming months?

David_White

The true answer is that no one really knows what will happen to house prices and interest rates as you could make a case for both increases and decreases.

One thing that is certain though is that if everyone puts life on hold and puts off buying the new house, the new car, the holiday etc then we are all in trouble.

Boredatwrork

Lenders mortgages rates are independent from the BoE interest rates, obviously they do have knock on effect, but Lenders have a mind of thier own.

Regarding Brexit, its crystal ball time. Looking at the mechanics, if the population drops, prices will get cheaper in theory as the ratio of buy and demand drops, but at the same time, who knows how many less/more are being built?
Like most things brexit, the reality is changes most likely will not occour for years, and even longer to trickle down.

Weigh up your personal situation, if you are renting how much money is going in a black hole if you were to sit for 12 months?
Is the house over priced compared with others in the area, is it a bargin or over priced?
Can you comfortably afford it?,
Bank lending rates currently are still low (they have been slowly creeping up over the last 12 months).
The reality that even if the market suffers, people in many cases refuse to believe it, and would rather sit on their property in many cases rather than sell for less than they hoped.

For me, when its all said and done, the warm fuzzy feeling of owning your own home, for the sake of a few k, is worth it, Especially if the alternative is that the extra few K may end up going on rent anyway.

Obviously don't know your specifics, so a bit general

amnblog

Financial uncertainty in the UK over an undefined period will not make it easier for you to buy a property.


Feel free to wait for prices to fall but hope that mortgage options do not.

foxy-stoat

Buy now if you can afford to and fix it for as long as you feel comfortable for - this has and will always be the case for residental market.

surfer9

Boredatwrork wrote: »

Weigh up your personal situation, if you are renting how much money is going in a black hole if you were to sit for 12 months?
Is the house over priced compared with others in the area, is it a bargin or over priced?
Can you comfortably afford it?,

It is a Shared Ownership property. 60% share of a 2 bed flat at £186,000. So the flat is worth £310,000, which is a lot for a 2 bed flat, but that's how crazy house prices have got in my area.

In this case, after looking into this property further.....I'd be throwing just as much money away buying this property as I would be renting.....

The rent on the 40% share is: £170
Then you have a monthly Service charge of £105 for trimming a few bushes.

Then on top of that Council tax, electric, water, gas, phone/internet, home insurance.....

= £540 and I haven't even paid my mortgage yet. I pay £540 currently for rental of a double room in a house-share.

I could just about afford to buy the property and keep up repayments, but when I am seeing the exact same amount of money going down the drain as renting - then it is not worth the added stresses of keeping on top of bills all the time and potentially getting into trouble....

Right now I am completely financially stable, secure, stress-free, so not really keen on living on the verge of having no money for years and years.

I think either buying a house under shared ownership (avoiding any service charges) or trying to get a 'discounted home' or one of these supposed 'Starter Homes' @ 20% discount are worth hoping for.

20% discount on a newly built home that has already dropped 20% because of Brexit would be a dream.

I can only hope house prices fall, but doubt they will, too many rich people in this country who are willing to buy.

Thrugelmir

surfer9 wrote: »

Many saying interest rates will go down, though some saying they may go up?

Lenders have to make a margin on lending to cover operating costs, make a profit etc.

Looking over the pond despite the US Federal Bank interest being close to zero. Mortgage rates have remained closer to 4%. There's been no intervention in the mortgage markets to distort rates. Who knows when the tide will turn here.

ACG

I have not really been monitoring the changes in detail so I could have missed some updates or lots of them, however here is a list of what I have noticed:

2 lenders have sent emails to say Business as Usual.
2 lenders have pulled some products (but both were fairly small niche lenders, one of those lenders products was only "soft" launched a month or 2 ago, so I am not sure it even counts).
3 lenders have sent updates since brexit with regards to rate and criteria changes, none of which were negative.

It is not really a detailed answer but in the main it does look like there has been very little impact one way or the other.

David_White

The general message I've been hearing is keep calm and carry on...

buglawton

I'm putting a quiet mental bet on the Base Rate falling further before it rises again.