What does Brexit mean for the property market, and what should you do if you're planning on moving home, either buying your first home, or selling your house and moving up? A degree of common sense is badly needed regardless of your situation, advises property expert Kate Faulkner.
Firstly, Faulkner cautions against excessive panic about Brexit, reminding us that much of the negative effect of the Leave vote on the property market so far has been largely preemptive, and perhaps unnecessary.
'People buying in the prime market tended to drop their offers just because we’d chosen to leave. Secondly, the often wrongly reported announcement from the Governor of the Bank of England that house prices would “drop” after Brexit, when what was actually said was that banks could cope with a fall in prices of up to 35 per cent as a worst case scenario, has held the market back over the last 12 months.'
Some people, Faulkner adds, have been holding back and adopting a 'wait and see' approach, seeing whether prices would drop further, while others have 'jumped into the ''known'' market' in which prices have fallen enough to make it worth buying. Some have decided to go ahead with a house purchase because of looming stamp duty changes – so, not because of Brexit at all. Whatever the reason you're planning on moving house, you shouldn't be doing it on the basis of waiting out to see if Brexit will cause a massive fall in house prices.
'As ever with property,' she continues. 'For me it’s less about worrying about house price rises and falls as you can’t control them. It’s more about whether you can afford to get on the ladder now or if your dream home is available, especially when so few properties are for sale. If house prices fall, you may lose your job, split up with a partner or the home you wanted may have already sold, so miss out buying altogether. It’s best in my view to move when the time is right for you, your family and your personal financial circumstances.'
Bearing Brexit in mind is still a sensible approach. Faulkner recommends that you speak to your broker or lender about how your mortgage would be paid if you were to lose your job. And if you're planning to sell and are worried about house prices falling, it's useful to think about your options, such as renting out a room, or even your whole house, in case you are unable to sell. But the most important thing is securing high quality legal and financial advice tailored to your circumstances.
Ready to buy your first home this year? Read out guide to mortgages for first-time buyers.