House prices could decrease as a result of the EU referendum
Ex chancellor George Osborne states that there may be a cut on interest rates
Mortgage approval rates set to decrease whilst the cost of home loans likely to rise
It is known by the world that the people of Britain historically voted to leave the European Union on 23rd June 2016. Six months have passed & so far we have seen:
- The pound drop to its lowest level since the 1980s
- The resignation of David Cameron
- The first female PM since Margaret Thatcher, Theresa May
- UK stocks drop
While all of the above have been publicly announced, nothing is set in stone on what affect Brexit has or will have on the property market. There has been speculation that house prices will lower which appears to have given first-time buyers an inch of hope in being able to afford a home.
Steve Gibson, 21, stated “Well I guess brexit might mean I can finally afford a house”
In addition, there has been talk of interest rates going down according to Mark Carney, Governor of the Bank of England which would support the affordability of housing. Whilst these two factors combined may be good news for the youth of today, those who already own homes do not seem so impressed.
Andy Plio, 40, “I see my house as an investment. Now that it may be worth less, I will get less money selling it on”.
Although the chance for first time buyers getting onto the property ladder may seem higher than ever before, Nationwide predict that the number of mortgage approvals will be weaker due to the leave vote. The former chancellor George Osborne also predicted that “the cost of home loans is likely to rise”.
This hence cancels out the hope that house prices & interest rates could decrease, as this makes youngsters less likely to be approved for a mortgage. No mortgage = no home!
At this moment in time, it is still very unclear what is to come for Britain in terms of the property market post-brexit. If anything is going to change, rest assured that it will probably not be for quite a while.
Since the rumours of interest rate cuts began circulating, rates have remained at 0.5%, just as they have done so since 2009. The Bank of England’s regional agents survey found that there was a dip in housing market activity after 23rd June due to Britons being uncertain as to what is to come post-brexit. Nevertheless, this does not indicate anything towards the changing of house prices.