Mortgages post Brexit

I’ve taken a while to put pen to paper to write about mortgages in this “Post Brexit World,” because…. well I was waiting for something to happen!!

So far, nothing, nada, nix, nil, niente, rien. Everything appears to be business as usual.

Following the credit crunch in 2008, the government reformed the UK banks beyond all recognition and today they remain in pretty good shape with plenty of reserve funds and money to lend.

Sure Mark Carney, the Bank of England’s Governor has hinted that fresh stimulus could be on the way in the form of a cut in the Bank of England base rate, but will this really be passed on to borrowers?

If you have an existing “Tracker Mortgage, “ this would be great news as your lender will have no choice than to bring your mortgage rate down in line with the bank rate. But for bank and building societies to pass any rate cut on to other borrowers, this would mean cutting their savers rates for depositors. Savers have of course suffered the most during the 7 years of historically low interest rates.

One of the silver linings of Brexit — for now — is that mortgage rates remain very competitive. My advice on what to do now is to Remortgage to an excellent deal without delay, in case these deals are replaced or withdrawn.

Home movers seem to be holding off in case house prices fall, but even before the Brexit vote, the London market was slowing, with prices for the most expensive central London homes down by 8% since mid-2014, according to estate agent Savills.

In other areas the current uncertainty may reduce the level of demand for housing, but only in the short term. Family housing always remains in high demand. There are unlikely to be many sellers in a position where they are forced to sell at a heavily reduced price and neither is the market likely to be swamped with cheap “repossessed houses” as the repossession rate is currently the lowest on record according to the Council of Mortgage Lenders.

There are winners and losers in everything, and Brexit seems to have given buyers a bit more buying power and borrowers cheaper mortgages for at least the time being!