Looking to buy a house and wondering how Brexit is affecting the property market for potential buyers? While the latest news on Brexit and house prices can still be summarised with, 'it's not great, but we'll wait and see', if you are a potential buyer, your approach should be proactive and anything but 'wait and see'.
- How to buy a house or flat: our ultimate guide to purchasing a property
The truth is, if you are thinking of buying, now is not the time to delay. With the following tips* in mind, you can do your best to minimise any further impact Brexit may have on the housing market – and maybe even get the home of your dreams at a good price.
1. First-time buyer? Now's the time to secure a good mortgage deal
The impact of Brexit, whatever its final form will be, is unpredictable for the economy, and may well have a knock-on effect on interest rates, which will mean more expensive mortgages. If you're in a position to take out a mortgage, it's best to do it now, while the interest rates are still low. Make sure you take out a fixed-term mortgage, so that your repayments are Brexit proof for at least a few years.
- Learn how to compare mortgages with our guide
2. New build vs. old home?
While buying a new build property via a government scheme such as Help to Buy can be a way to get on the property ladder with a small deposit, you may want to weigh your options carefully at this time. New builds come with a new property price premium that could land you in negative equity if house prices drop significantly after Brexit.
Think of this as being similar to buying a new car: its value reduces as soon as you've bought it; with house prices in flux, a large drop in price would mean that if you were to decide to sell, you could end up selling for less than the price you originally paid. While this won't necessarily happen, an older home is currently a safer investment.
3. Plan to stay at your new home for as long as you can
This is a good strategy generally, Brexit or no Brexit, but now especially is a good time to only buy a property you're happy with it and will stay for a good few years. House prices are likely to fluctuate, but will stabilise over time. So, we advise against hasty purchases 'just to get a foot on the ladder' – you may end up stuck in a property you don't like, or that doesn't suit your needs.
4. Already own a home? Now is a good time to move
If you are already a home owner and are looking to move, now is a good time to look for a property, especially if you've been planning to move to London or the South East. Prices in these areas have dropped the most since the Brexit vote, and properties have been slow to sell, so, with a bit of research, you could buy a property in an area that has always seemed unaffordable – provided your current home is in an area where houses have been selling well.
5. Consider buying at an auction
While many properties listed for auction may require substantial renovation work, not all will. The main advantage of buying at an auction right now is the guarantee of a quick purchase with no complications from long property chains. You will need to pay the ten per cent deposit as soon as the auction closes, but then there's no risk of being gazumped.
- Find out more about buying a house at auction in our guide
Tips developed with the help of JMP Solicitors