Brexit And The Mortgage Market
March 29th saw the triggering of Article 50 in the UK. In doing so, a period of uncertainty is expected within the mortgage market. The economy, domestic political issues, the stock markets, inflation, house prices, property, the retail sector – all are now being viewed through the Brexit prism, all judged in relation to Brexit and its potential consequences.
The mortgage market in recent times has seen a surge in new lenders with interest rates gradually decreasing, however, moving forward who knows what will happen?
From Capital Fortune’s conversation with lenders, they believe now is the best time in a long while for borrowers to take out a medium to longer term fixed rate. One of the unforeseen outcomes of last June’s vote was the cut in the Bank of England’s base rate, from 0.5% to 0.25%, for the first time in seven years
Although the aftermath of June’s vote has undeniably caused political and economic uncertainty the next two to three years could be incredibly interesting.
Ultimately, there may be benefits. Since the vote, the mortgage market has grown in size with new lenders and 20% more products available than there were this time 9 months ago. In certain areas of the country house price growth has remained robust and there is nothing at this stage to suggest that the triggering of Article 50 in the short to medium term will have the same effect.
There is understandable caution and perhaps nervousness in the market about a potential rise in interest rates and ultimately what the effect from the fallout will be but this will only become clearer in the months and years ahead.