With so much uncertainty in the UK since the ‘Leave EU’ vote three years ago and the possibility of a ‘no deal’ Brexit come 31 October 2019, you may be questioning whether now is the right time to buy a house to get on the property ladder.
As a first home buyer, the last thing you’ll want to contend with once you got your home loan is redundancy, and there is no doubt the UK is experiencing uncertain times, and it is making business and the property market jittery.
However, the flip side to this market nervousness is desperate sellers (vendors) will accept lower offers and often sell their property below the market value, so this activity alone makes it a buyer’s market. So could now be the best time to buy, or should you wait until after Brexit?
Well, here are a couple of things to consider.
House prices are down
Property prices are at the lowest they’ve been for a couple of years since the Brexit referendum. However, industry specialists predict that fewer houses are showing further price devaluation. In essence, homes aren’t getting any cheaper. So, this could be the best time to buy if you want to snag a bargain and get the best value for money.
However, everyone’s got an opinion particularly right now when everything in the UK is up in the air, so listening to one news outlet without considering more mat be foolhardy. In a recent article on Brexit 2019 the accountancy firm KPMG says another dip in house prices will result should there be a no-deal Brexit, and it could be as much as 20%. Should this be the likely outcome, buying a property now would not be the right time unless you can secure it for as much as 20% less than it’s current market value.
What all homeowners want to avoid is negative equity in their biggest asset. Where the value of the property is less than what’s owing on it, this is called a ‘negative equity’ position. Lenders can request a top-up, i.e. pay down the home loans to adhere to lending requirements. Lenders require the homeowners to have an equity position in their home, and it’s usually 20% or more of current market value. Therefore when there is a catastrophic event like the ‘great recession of 2008-2009, it can send distressed homeowners to the wall where they walk away from their home, and the lender lists it as a mortgagee sale aka a foreclosure sale.
Lots of homes for sale
Are there lots of properties for sale on the market? Not according to recent commentary. Property sales volume is at it’s lowest since 2016. Sellers are holding on, and many buyers have also shelved their plans, and this could be down to the threat of a no-deal Brexit, with many people seem worried about what will happen if this passes.
Many homeowners who voted to remain in the EU are likely planning on moving abroad to other European countries. As such, their homes may be on the market, or they’ll be selling up soon. All of this works in favour of the buyer!
With all analysis and experts predictions, they contradict their earlier findings at a whim, , so the best way to know if it’s a great time to buy a house is to know your financial position and what is required to keep it positive. Buy below market value, get the best terms for your home loan and make sure you’ve got a healthy deposit.
So, to conclude, it is potentially a perfect time to buy a house in the UK. Even with a no-deal Brexit looming, there is always a bargain just around the corner. If you’re ready to buy and you’ve done your research and know you’ll be on the right side of any major event that could bring down the house of cards then go for it.