Buy now or wait till BREXIT

epinjy

I'm looking to buy right now in the east midlands. Prices have risen a lot in the last 5 years here but a lot of that was just getting back to 2008 levels. I don't think they are too overpriced and I certainly think there is much more room for them to go up than down still. I'd love a brexit crash, but I don't see it happening (if it did happen, then it wont necessarily make it any easier or even cheaper to buy a house).

Just for context, I am looking for a 2 bedroom semi or end of terrace in one of the nicer areas of town, on an average single salary with a budget of around £160k and a £30k deposit. I'd be more worried about a crash if i was looking at homes for 2-3x the price, or only had a 5% deposit, or bought into silly help to buy scams.

steampowered

I don't think Brexit is likely to have a particular impact on UK house prices.

The main impact of the Brexit vote has been felt in exchange rates.

The value of the pound has already sunk about 15% against the dollar since the Brexit referendum. So you are already about 15% poorer due to the referendum result in international terms, and the complete shambles that Brexit represents has already been factored in by the markets.

Remember that houses in the UK are £ denominated assets. So even if Brexit goes badly and the value of the £ crashes, you wouldn't expect the price of houses to change when look at them in terms of £.

You would be more concerned about the impact of Brexit when looking at items which are ultimately priced in USD (e.g. petrol) or Euros (e.g. imported fruit and veg). Or if you were planning to move abroad (as your £-priced house would suddenly be worth a lot less when compared with a Euro-priced European house).

steampowered

sevenhills wrote: »

The poorly performing economy is affecting house prices negatively, I believe Brexit or a Labour government could cause public confidence to decline, leading to a crash, but with demand for houses being strong, its unlikely to be a big crash.

At the risk of taking this off topic - people keep repeating this sort of stuff about Labour, but it seems to me there is very little evidence to support it.

I remember during the last two elections when people on MSE were worried about what would happen to the value of the pound if Labour won. Guess what? The Tories got in and the value of the pound has sunk by almost 20% since Labour were last in power in 2010.

I also remember when people were worried about what Labour might do to the UK's credit rating. The facts are that the UK had a perfect AAA credit rating under Labour, but has been downgraded twice since the Tories got into power in 2010.

I also remember when people were worried about what would happen to the national debt. The Tories surpassed the entire amount borrowed by Labour from 1997-2010 (13 years) by about 2016 (after being in power for 6 years). Read this if you want a simple factual comparison of the record of each party since 1946 when it comes to borrowing vs. repaying national debt.

I also remember when people were worried about the impact on the economy by Labour raising VAT and national insurance. Guess what? The Tories raised both (despite confirming there were "no plans to do so" during the election campaigns)!

When you stop and look at the very basic economic facts, they simply do not support paranoia over Labour - and suggest that one should be more worried about the Tories ...

Thrugelmir

steampowered wrote: »

The value of the pound has already sunk about 15% against the dollar since the Brexit referendum. So you are already about 15% poorer due to the referendum result in international terms, and the complete shambles that Brexit represents has already been factored in by the markets.

There's a world outside of Brexit. How many times has the Fed increased interest rates? What rate of return do 10 year US Treasuries offer? Far more pertinent questions in the context of exchange rates.

steampowered

Thrugelmir wrote: »

There's a world outside of Brexit. How many times has the Fed increased interest rates? What rate of return do 10 year US Treasuries offer? Far more pertinent questions in the context of exchange rates.

I agree completely that there are factors other than Brexit.

That said, one does need to recognise that most of the crash happened within one day of the Brexit referendum - which suggests that Brexit is a very important reason for the drop in the value of the pound we have seen since the referendum.

In terms of the Op's situation, I think they should just go ahead and buy the property personally. It seems unlikely that Brexit would have a massive impact on house prices, and now is a good time to take advantage of the very low mortgage rates on offer.

AnotherJoe

flatulantyounggoat wrote: »

Simple question really, I'm holding off house hunting until BREXIT has occurred. I think there will be a massive house price crash?

Or, maybe there won't be. First time buyer either way. Any thoughts? Should I just get a move on with it.

Brexit is years away. It doesn't happen overnight on 29th march. Thats just when detailed negotiations start. The (even if that deadline is kept to which now seems unlikely) there's a year of negotiation, probably more, so delay and then most likely a phase out over several more years. Might be 2, might be 20.



I dont think there will be a "massive" house price crash, certainly not on 29 March, after all everyone knows that date, its hardly a secret, so but i do think only people who really want to buy or sell are doing so already, and it is a buyers market.


I would buy now if that works for you financially, I wouldnt buy a brand new place or not without a big chunk off anyway.

Bossypants

I'm buying, and someone agreed to buy my place just before Christmas (knock on wood nothing goes wrong!). My logic is that I don't want to live where I am any more and I do want to live where my onward purchase is, and neither of those facts is likely to change because of Brexit. Based on what the estate agent has told me, my prospective buyers are employing much the same logic. We all plan to stay in our new places for at least the next decade if not more (best laid plans, of course...), though, so will hopefully be able to recover any losses.

sevenhills

steampowered wrote: »

I don't think Brexit is likely to have a particular impact on UK house prices.

The main impact of the Brexit vote has been felt in exchange rates.

The UK stock market was higher in April 2015 than it is today, that is a very poorly performing stock market, they said a lower value of Sterling would increase it.

sevenhills

steampowered wrote: »

At the risk of taking this off topic - people keep repeating this sort of stuff about Labour, but it seems to me there is very little evidence to support it.

Any governmnet which is strong with clear policies could be a good government, that is going to happen with todays Labour.

PhilE

sevenhills wrote: »

Any governmnetwhich is strong with clear policies could be a good government, that is going to happen with todays Labour.

Have a look at their Inheritance Tax. Its going to affect lower income people. Work hard to pay of your mortgage all you life, paying bank interest rates. You want to leave your house to your kids and unless they have thousands of pounds you can't.

So Labour will be increasing tax for lower income people, and forcing young people to get more into debt, paying of mortgages on houses they can't leave to their kids.