It’s Thursday, one day early as James and Peter are busy bees tomorrow, so have your weekend fix of our blog a day early on us! Carry on reading for this weeks blog, including thoughts on Brexit, help to understand the advantages and disadvantages of long term fixed rate mortgages, a request for feedback on our blogs and industry insights from David Florence at Grayson Florence Property in Trowbridge. Enjoy!
Should I wait to buy because Brexit might make house prices fall? – Source: The Guardian
I’m trying to buy a property in Oxfordshire but some friends say I should hold off on the deal.
Q I am trying to buy a property in Oxfordshire but some of my friends have advised me to postpone any purchase because of the possibility of a no-deal Brexit. Some people believe property prices will go up while others believe that prices will fall. So I can’t decide whether it’s the right time to buy or whether I should wait. Can you tell me what to do?
A No, I can’t tell you what to do and nor can I predict the type of Brexit we’ll end up with next March or how it will affect house prices. But I can shed light on what the experts think. The governor of the Bank of England. Mark Carney, has warned that if it all goes horribly wrong and we face a “disorderly” Brexit (which means a no-deal one), the economy will suffer, unemployment, consumer prices and interest rates could rise while – in a worst case scenario – house prices could fall by as much as 25% to 30%. So your friends who think that house prices will fall could have a point. On the other hand, so could your friends who think that house prices will rise – although it’s more a case of prices rising but not quite as quickly as they were predicted to pre-EU referendum. Back in February this year, experts were predicting that house prices would stop going up or, at the very least, go up by no more than 1%. They weren’t far off but according to figures recently published by the Office for National Statistics, average house prices in the UK have, in fact, increased by 3.1% in the year to July 2018 (down from 3.2% in the year to June 2018).
So where does this leave you and your potential house purchase in the far-from-cheap county of Oxfordshire? If you are more confused than ever, I wouldn’t be surprised. But if you are left feeling that as no one can predict the future, you might as well ignore your friends’ conflicting views and make a decision based on those things which you can control rather than those – such as Brexit – which you can’t. So if you’ve found somewhere to buy that you feel you’d like to live in for a while, is handy for work – where there are nearby schools for children (if applicable) – and which satisfies your other household requirements, I’d be tempted not to wait as you may run the risk of losing it if you do and/or having to pay a higher price. If you are thinking of buying a property in Oxfordshire for no other reason than you think it could be a good idea, it might be an idea to ask yourself: why?
Staying with the above theme, many customers who are considering buying or remortgaging are asking us the same question at the moment: “Should I fix for longer because of Brexit?”
There is no right or wrong answer to that question, but the advice we give everyone at Foursquare Financial is this: Don’t choose a mortgage product based on the economy or what we think the economy will do. Each client is an individual case. We advise you based on your own personal circumstances and based on what we can account for, namely, your future, which is far more in your own hands than external factors such as economy and politics.
As an example, we’ve seen a number of people recently which have had to swallow a sizable early redemption penalty, because 2 years ago they fixed for 5 years and have since had children or met a partner and needed to move home. If you are buying a starter home (such as a one or two bed house or flat), a 5 year fixed is unlikely to be the right option for you as it ties you in to a mortgage deal with little flexibility if life changes or throws a curve ball. However, on the other end of the spectrum, if you are looking to buy the forever home at the latter stages of your mortgage life, it is likely that the security offered by a 5 year (or even a 7 or 10 year product) is right for you, but even then, factors such as receiving a lump sum inheritance over the next few years due to aging parents should be considered.
Whatever you are planning, or whatever your own future holds, that is what you should plan your mortgage around. So in answer to the “Should I fix for longer because of Brexit?” question this section started with, the answer is only if it suits your own personal circumstances. History teaches us that predictions on economy or politics is a dangerous game, and therefore, we will only advise what’s best for you. We do not give generic industry advice. Ever.
For a consultation on what is or isn’t right for you, click here.
We’d be interested in some feedback for this blog. We are now on week 6 of our weekly blog, and want to know what things you are finding interesting, what are you not enjoying, what would you like to see more of and what would you like to see less of? We are a business that wants ultimately to do what is right for our clients. And if you are reading this blog, it is likely you are either a client, or could be one in the future, so feedback is essential! Drop us a line on firstname.lastname@example.org for any suggestions!
Speaking of customer satisfaction, we are proud of the work we do, and on the whole our commitment to making our customers journey as smooth and enjoyable as possible is evidenced by our reviews on Facebook and the messages we get thanking us personally. If you are interested in what our clients say about us, click here. We would love to help you or your friends and family to save money and enjoy their experience with us too!
From Our Network – David Florence, Grayson Florence Property, Trowbridge
Is it too early to say the C word??
Christmas has started to creep upon us, I'm already seeing selection boxes in the supermarket!!
When we look at the property market we often talk about when is a good time of year to sell over others, and whilst the right time largely depends on your own situation and motivation to move - there are certain times of year that offer stronger market conditions than others. The period we are in now is one of them- we are still able to get a sale from listed to completion before Christmas day!! It's tight, but it's still doable! If you are thinking of moving or selling and want to be done by Christmas, there are a few simple tips to help!
1: listen to your agent! A good agent will give you honest advice to get you moving, it should be a transparent plan of action not just a guess and hope strategy.
2: understand that although your activity might be lower, each viewing is likely to be more motivated, so ensuring the property is presented correctly is key!
3: when your agent gets the professional marketing sorted and ready, work with them to ensure the simple things like cars are off the driveway, kitchens are tidy and toys put away etc - people judge your home so quickly in photography it's key to be fantastically presented to grab the attention.
4: ensure you have a clear understanding of your costs of moving and have spoken to a professional broker like Foursquare to ensure you know your upper and lower limits when it comes to offers and accepting.
If you need any advice give us a call and we would be more than happy to help or offer advice to get you moving.
Grayson Florence Property
More from us next week (at the more conventional time of lunchtime Friday!) Pete & James 😊