Brexit

I’m a First Time Buyer – should I wait for Brexit to be resolved?

Brexit currently dominates the news and most people are now bored to tears with it all, wanting it to be over and done with.

When someone is thinking about taking the big step of buying their first home, there is always doubt and nervousness at the best of times, and it’s understandable that Brexit might give some people second thoughts.

Having witnessed the some of the previous peaks and troughs of the property market, in my opinion it is consumer confidence that is the real driver.

As such, when there is uncertainty over the economy like there is now then people often bury their heads in the sand and put off making big purchases.

Curiously, at the moment this seems to be unsettling home-movers more than it is First Time Buyers. In 2018, people taking their first step on the property ladder accounted for just over 50% of all home purchases using a mortgage, the Halifax First-Time Buyer Review found, the first time since 1995 that first-time buyers have accounted for more than half of home purchases with a mortgage.

Why is this so?

Well, moving up the ladder is full of pros and cons. Some people HAVE to move home, for example if their family is growing, but for more people it’s a choice.

They like where they live most of the time but it would be nice to have a bit more space or be in a slightly nicer neighbourhood. It’s stressful though, buying and selling at the same time is hard work and it consumes you. People are often not certain whether they are doing the right thing and it doesn’t take much for them to talk themselves out of it.

And for me, that’s what it is happening right now, those that are 50:50 about moving or not moving are playing a waiting game. That’s why there are so few houses on the market and Estate Agents across the UK are starting to close branches as a result.

So what about First Time Buyers? Well, their view is different. Interest rates are very low and 95% mortgages are readily available, this is much different t0 10 years ago!

If the economy were to downturn then Lenders may want higher deposits again to reduce their risk, putting home ownership beyond the reach of many.

Fair enough, ideally First Time Buyers don’t want to buy a big asset that could go down in value if Brexit ends badly but even if that happens they are concluding that it’s still better than renting where the only winner is the Landlord.

Malcolm Davidson

Mortgage Broker in Beverley
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