Reasons to be cheerful
23 June 2016 will go down in history as a seismic day for British politics.
The public dealt Prime Minister David Cameron a bitter blow as the referendum to leave the European Union (EU) unexpectedly ended in a ‘yes’ vote, following a heated and divisive campaign on both sides.
But what effect has Brexit had on the mortgage market?
Most analysts were certain the UK wouldn’t vote to leave, but voters were left trying to cut through the propaganda and make a balanced decision. Vote Leave’s “Take control” edict was heeded as they secured a narrow, unexpected victory in the referendum. Tales of post-referendum apocalypse were common in the days that followed, but has this been reflected in the data?
A stable economy
The economy as a whole seems to have been largely stable following the vote, as recent figures showed 0.5% growth in the three months post-Brexit. On the flip side, the number of mortgage approvals fell in August to the lowest level since November 2014 and some experts have predicted big banks will look to relocate away from the UK in 2017. This could create funding issues for consumers and diminish the amount of choice in the market.
With the Government’s long-term plan to negotiate the UK’s exit from the EU unclear at the moment, the Buy to Let market has been particularly robust, with a quarter of sales between July and September 2016 either investments or second homes. This strength in the market was in spite of fears over the economy following Brexit and a stamp duty increase for second homes in April 2016.
It’s important that we take a pragmatic, business-as-usual approach. Opportunities exist no matter what the circumstances, and there’s a danger that talking prospects down could cause a lack of confidence in the market. A proactive and positive manner can help you, whether you’re a first-time buyer, looking to move home, or enter the world of Buy to Let.
Some Buy to Let mortgages are not regulated by the Financial Conduct Authority.
Your home may be repossessed if you do not keep up repayments on your mortgage.
