Brexit: Should I wait to buy as house prices could fall?

Buying a home is always a big decision, even when everything is on the up and you’re feeling confident. However, with an undecided Brexit still dogging the economy, is now really the right time to make one of the biggest investments of your life and buy a property?

The answer, as always, is complex and depends on each buyers’ individual situation. In some cases, the worries surrounding Brexit shouldn’t be enough to put off the purchase of the perfect home. However, for other potential buyers, it could be worth waiting a few months before your take the plunge.

When buying now is the right decision

With warnings from Bank of England Governor that UK house prices could slump by up to 30% in the event of a no-deal Brexit, it’s a good idea to think carefully about any potential property purchase.

If Brexit does end up being disorderly and house prices are hit, buying right now, ahead of any potentially notable fall wouldn’t be a great position to be in.

However, there is another element at play here – a tight housing market. Supply of suitable homes for sale across much of the UK is pretty low. Indeed, that’s partly why property prices remain supported and haven’t fallen, despite the spectre of Brexit.

In addition, mortgage interest rates are still at very low levels, even despite a 25-basis point rate hike earlier this year. That means you can agree a good mortgage, for the right property for you.

If you’ve found the perfect home to suit your needs and your finances, even if mortgage rates begin to climb more quickly than currently expected, the right decision could be to make the purchase.

There are a few reasons behind that decision:

  • The right property, in the right area, at the right price might not come up again.
  • Right now, you can lock into a great fixed rate, multi-year mortgage deal.
  • Brexit might work out better than you expect and prices remain similar to current levels, or even begin to rise again.
  • There’s interest in your existing property at a price you’re happy with and that works.

For some, waiting would work out best

However, while there are some good reasons to not sit on your hands but make that move, for others, a bit of patience may well reap rewards.

For those among you who are comfortable where you are and your reasons for moving aren’t as urgent, sitting and waiting for a few more months could see you buy the perfect house at an even better price, a few months down the line.

Of course, this will require close monitoring of the UK’s property market particularly in the areas you’re keen on buying. As the March Brexit date draws closer, home sellers could become a little keener to sell at any price so they can move on.

And that could mean a bit of hard bargaining from you, can bag you a great house at an even greater price! Of course, it does make sense to secure a good mortgage deal sooner rather than later – just in case. The promise is usually good for up to six months, so you could watch for any dip in confidence over the eventual Brexit deal and move at the right time. Having your finances in place will also serve to make you a more attractive buyer.

If UK property prices do take a tumble post Brexit and you have everything in place, you should be able to buy that home you want, in the area you love, for a price you’re happy with – something you might not have achieved if you took the plunge towards the end of 2018.

As you can see, for both the buy now and wait options, there are a lot of caveats. However, they are relevant to a lot of potential home-buyers – in both camps. As we said, buying a home is a big decision. No matter what the broader backdrop is.

If you do opt for the buy now route, just make sure you’re happy with the property, the price and can cope with higher mortgage payments. For those of you for whom waiting makes the most sense, keep a close eye and be ready to move at the right time.