We are just over a month away from Brexit being implemented in the UK, and it is already starting to have an effect on the country’s house prices, which is leading experts to be concerned that it could very well lead to a full-on house market crash. In the most recent statistics released by the bank Halifax, it is estimated that house prices in the UK have dropped on average by 2.9 per cent in January alone. This percentage has increased particularly in some areas of the South of England and a number of areas of London, as fears regarding Brexit have aroused concern on the housing market. With all this in mind, is there anything you can do as a homeowner to retain the value of your property despite Brexit? The Premier Loft Company takes a further look.
Buy a property in an area where prices are rising
Not all areas of the country are experiencing a fall in house prices. For example, according to the index of British cities created by property analysts Hometrack, both Edinburgh and Liverpool have both been experiencing in house price growth, with both cities seeing a 6.8 per cent and 6.3 per cent rise respectively. Nottingham, Cardiff and Birmingham have also experienced a boom, with housing prices increased by about 5.9 per cent.
Whilst not necessarily feasible for everyone to move location, it is definitely an option.
Remortgage your property and overpay
Another option to you is to remortgage and overpay. At this moment in time, mortgage rates are almost at a historic low, which is an opportunity homeowners should seize in the run-up to Brexit. This is because owners can capitalise on potential interest rate rises as a result of Brexit in the long-term by getting a cheap deal now. By doing so, you can reduce the cost of your monthly payments, especially if you are on your lender’s standard variable rate. As you make these savings, it means that you will be then in a position to overpay your mortgage payments each month, enabling you to reduce your mortgage costs in the long run. In the event of house prices falling dramatically in the future too, overpaying for your mortgage can act as a buffer, helping to reduce the risk of negative equity.
Avoid expensive renovations
If you can possibly avoid it, it is wise to avoid carrying out costly home improvements, even if you are doing so as a means of increasing the value of the house. This is because, in a falling market, it is unlikely to make it more valuable. Experts recommend not to make significant changes, like a loft conversion, unless you anticipate staying in the property for at least the next five years. It is generally considered to be a risky selling strategy, and not necessarily one that will pay off for you financially either.
Get your savings in order
It is also worthwhile making sure you have money saved for a rainy day. It is important to not forget that the housing market often reflects the wider economy, therefore you should make sure you have easily accessible savings that are available for the next six months, in the event of unemployment. It is recommended that you have these in addition to any other investments you may have, which may not be so easily accessible in the event of an emergency.