Brexit and Mortgages: What Does the Future Hold?
Amidst so much political turmoil, it can be hard to see the wood for the trees at times. Brexit has the potential to have such widespread economic effects that there are a host of predictions and projects concerning almost every aspect of daily life. For the benefit of those with an interest in property investment, we’ve tried to unpick some of the speculation in order to focus on what might happen to mortgages after 29 March 2019.
“The resounding defeat of Theresa May’s EU Withdrawal Agreement by Parliament on 15 January brought us one step closer to a disorderly, no deal Brexit. Many experts believe that such an outcome could lead to a rise in interest rates, which would impact those with tracker or variable rate mortgages.”
What Affect Will Brexit Have on Mortgages?
Among those experts is Mark Carney, Governor of the Bank of England, who is well positioned to know what interest rates might or might not do. He has warned that a no deal Brexit might be a precursor to an interest rate rise. The Association of Mortgage Intermediaries has echoed Carney’s warning, as have numerous other financial bodies.
Of course, as with all things Brexit, there is an equal queue of experts predicting that interest rates will come down after 29 March. The Bank of England has been known to lower interest rates in order to stimulate and shore up the economy. As such, the Monetary Policy Committee may well decide that interest rates should come down, even in the event of a no deal Brexit. The committee’s next meeting after Brexit will be on 2 May and property investment companies and their investors will no doubt be keeping a close eye on the situation, as well as mortgage holders across the UK.
“Until we know more about quite how the UK will be uncoupling from the EU on 29 March, it is impossible to say with certainty what will happen to interest rates and mortgage rates. However, that is always the case. Nobody can see the future, so there is always the risk of interest rate changes impacting on mortgages. This is why investors factor in such potential outcomes when they consider their investments in the first place. As such, all we can do at this stage is keep calm and carry on!”
The Country Sees House Prices Rise Despite Brexit
Investors looking to carry on as normal while the political wrangling continues have some outstanding properties available to them at present. Hadrian’s Tower, for example, in the North East city of Newcastle, is a landmark development that is set to redefine stylish urban living in the city. Due to become the city’s tallest building, its 27 storeys will house a range of superb, dual aspect apartments, along with a contemporary café hangout spot, concierge and sky lounge with views across the city.
The North East region is enjoying the largest monthly house price rise in the country right now, at 1.2% between October and November 2018 according to the government’s November House Price Index. At the same time, Newcastle is undergoing extensive regeneration work. As such, Hadrian’s Tower presents investors with an exciting and timely opportunity to enjoy healthy yields as part of this prestigious new development.
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