As Theresa May this week confirmed the triggering of Article 50, so begins a 2-year period of questions and uncertainty. The chief concern for homeowners being “what impact will Brexit have on the value of my home and the cost of my mortgage?”
There has been an impact on the housing market since the referendum vote last year. In London, house price growth has stalled, and cities like Manchester and Bristol are growing at a faster rate, but then the London housing market was growing unsustainably anyway. And the number of house transactions is slowing. According to HMRC, the number of house transactions is down 9 per cent in the second half of 2016, compared to the previous year.
So whilst there may be a little stagnation in house prices, and a small slowdown in house transactions, what impact will there be on the mortgage market? Lenders rates are still at record lows, and that trend was continuing at the end of 2016, even after the referendum vote. Whilst there are murmurings that interest rates may rise, to combat growing inflation, the real impact to homeowners of mortgage costs increasing is minimal. The most likely interest rate rise is from 0.25 per cent to 0.5 per cent, which is unlikely to cause too much damage financially.
It seems that in the short-term, the Brexit impact will be minimal in 2017, as we all begin to understand what Brexit means. 2017 is likely to be a year of mild stagnation, and something of a waiting game, as we reveal the cost of Brexit to the UK economy and the knock-on effects on the housing market, interest rates, and mortgages.
Grange Mortgages are here to offer advice and support to help you purchase a home and secure the best mortgage deal for your circumstances. Call us on 01604 877999.