What are your thoughts on a potential 25% fall in the value of your home as a result of Britain voting ‘Leave’ on June 23? Whatever your reaction to that scenario, here at The Financial Planning Group, we don’t envisage local residents will be as cheery as Jeremy Warner who, in his article in the Telegraph earlier this week, claimed he would celebrate if Brexit led to lower house prices.
Writing in response to credit rating agency Fitch’s warning that Brexit could wipe a quarter off the value of UK homes, bringing them down to what it described as a more “sustainable” level, Warner wrote; “ There are few things likely to turn me into a Brexiteer, but the prospect of falling house prices might just do it, and I speak here as someone with some degree of housing wealth.”
He continued, “Unless you are a buy-to-let landlord – a tiny minority of the population – or about to sell up and leave the country, the price of houses doesn’t matter (since all house prices move up and down together). Indeed, if prices were a bit cheaper, and therefore more affordable, I would wager that most people would be a good deal happier.”
The IMF managing director, Christine Lagarde, angered Brexit campaigners last week by also pouring petrol onto the flames of potential property price falls when she predicted panic among investors would trigger shockwaves throughout the economy following a vote to leave, with shares and property prices diving into a downward spiral.
In truth, the affect that could have on the residents of Teddington doesn’t bare comprehending, with many plunged into negative equity and facing financial chaos, however, before you reach for a bottle of gin or press the panic button, not all forecasts are as gloomy.
A recent report published in City AM newspaper printed the results of a survey of over 1,000 homeowners which found that although 55 per cent of people believe leaving the EU would impact their house price, 34% thought it could increase their property price and 21% believed it would decrease the price of their property.
Whatever your thoughts on voting in the European Referendum next month, and how the result could impact your personal financial situation, one piece of advice to consider is to take full advantage of the current low mortgage rates and to fix your home loan expenditure for the medium term.
To speak Steve Padgham about your property finance or mortgage requirements, or to find out how to go about securing the best low-rate deal currently on the market six months ahead of your current deal ending, please call him on 020 8614 4782, or e-mail firstname.lastname@example.org.