Brexit, What Next for the Yorkshire Property Market?

Whether you are pro or anti Europe, or simply not sure, as predicted the Brexit vote threw the money markets into a spin on Friday when the results were announced.

Periods of uncertainty will always have that effect on the stock market and currency levels. So now the dust is beginning to settle,what next for the property market in our area?

Mortgages

Will rates go up, will they go down?

This prediction from the BBC, not with standing the London market.

Before the vote the Treasury predicted a vote for Brexit would mean a rise of between 0.7% and 1.1% in borrowing costs (on top of what happens anyway), with the prime minister claiming the average cost of a mortgage could increase by up to 1,000 a year.

A rise in interest rates would also affect those in rented accommodation, as costs for landlords would go up.

But amid fears that the vote for Brexit heralds a period of low growth, some economists are suggesting the Bank of England will cut interest rates. In which case, the cost of lending could actually fall.

David Tinsley, UK economist at UBS, said he expects two rate cuts from the Bank of England over the next six months, taking interest rates from a current record low of 0.5% to zero.

Mark Carney the governor of the BOE has already announced a 250 billion reserve to bolster finances and some clients are looking at fixing their mortgage rates now to give themselves peace of mind during the changeover period.

The Council of Mortgage Lenders, which represents lenders in the UK, says it expects a wait and see approach from potential buyers and sellers of property following the referendum vote, but no house price falls.


House Prices

Supply is still an issue in many areas which has helped bolster house prices and the National Association of Estate Agents feel that prices will continue to rise slowly, even if there is a short term drop of around 2,300 outside of London.

A slower rate of increase is what they are predicting rather then a fall in real values.

London is likely to see the biggest change with prices losing on average 7,500 over the next three years compared to their predicted growth.

In our trading areas its very much business as usual. There are still buyers looking to buy, and needing to move. We have had no announcement of any changes to mortgage lending criteria yet from any of the lenders we deal with.


Looking Forward

There will obviously be concerns about the economic climate but nothing sinister is going to happen overnight and the hysteria being reported in the press needs to be taken with a pinch of salt and monitored.

The money markets are fluctuating currently, a situation George Osborne has attempted to calm with a speech this morning, and further developments from both main political parties now need to back up that message.

A new leader for the Conservatives quickly would likely bolster the financial position of the UK.

Negotiations for us to leave the EU will take at least 2 years and as such many parts of the actual process are not set out yet.

The UK housing market and its people are fairly resilient and we have weathered many ups and downs in the economy in the nearly 60 years we have been on the High Street.

If you would like to talk to experienced experts about Brexit and your home aspirations then feel free to pop into the office or give us a call.

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