We have affirmed to our buyers that London remains London, and that invariably, if a client’s employment, and income is safe, then buying a property can, in some cases, end up cheaper than renting. For re-mortgage clients there was a concern that their pre-Brexit valuation won’t stack up, but there has been little evidence of this so far, with down valuations still a relatively rare phenomenon and in our experience, no more common now than pre referendum. What people need to understand, is the press love scare-mongering. Some publications have been forecasting property valuation decreases in the region of 5-12% which is unsubstantiated by hard facts. So with ultra-low mortgage rate and valuations holding up well, now may be a great time to re-mortgage your property.
From a Buy-to-Let investor’s perspective, Brexit could be good news for you, as some buyers have put their search on hold – thus leading to greater stock levels and a potential increase in demand for rental properties. On the mortgage side, pricing & rental stress test calculations for landlords are getting tougher, irrespective of Brexit, meaning to reach the rental criteria requirements, landlords may be forced to drive rents up. There is a fine balance to be struck here. Overall though, I think there is a great opportunity to be had, whether you are an existing home owner looking to remortgage and save some money by obtaining a lower interest rate on your mortgage deal, or else a new purchaser. Putting the doom and gloom of some commentators to one side and using the global financial crisis of 2007-08 as an example, if you had bought a property in London SW12 in December 2008 then Rightmove suggests that the average price would have been £345,305. This average increased to £804,887 in January 2016. A startling level of growth, and whilst we are not expecting the same levels now, we certainly think the market remains very solid overall.
Lest we forget, London is a very internationally influenced economy on the property side. The Brexit has led to a fall in the value of sterling. Opportunistic, foreign buyers, have seized this opportunity to jump into the market. Sales in prime London real estate has risen 38% in the week following Brexit, according to Knight Frank.
All of the estate agents we work with are very positive about Brexit, and have seen their registrations increase, for those buyers who are serious about the property game. As advisors, we’re very much the same, and we believe now is a good time to buy. Rates are low, property prices have cooled – what are you waiting for? It is believed the cooling of house prices will be short lived, and that over the next 5 years, property should still experience a 14% growth.