With just under a year to go until the U.K. exits the European Union, thoughts inevitably turn to how Brexit may affect the mortgage market, particularly where re-mortgages are concerned.
While it is still far from clear how Brexit will pan out it is worth bearing in mind that the housing market is relatively well insulated compared to many other parts of the economy, as most activity is domestic. The country’s current position is a little mixed. The rate of inflation has risen, and prospects for economic growth have been subdued. The jobs market on the other hand remains strong, with a record low rate of unemployment. Wage growth however has been weak and falling in real terms. If Brexit adversely influences the economy then the Government may see the housing market as a way to stabilise the economy, which it has done before, and make policy choices to support the mortgage market.
Why might you consider re-mortgaging now? The main reasons are to save money by moving to a lower rate, reduce the payment term. It can also be a way to release the equity in your home. With house price growth looking likely to be “flat” in 2018, house moving activity could well remain slow, with a shortage of good homes available. This lack of choice for moving house is prompting many people to look at their options if they remain in their existing property.
With so many variables involved accurately predicting the future impact of Brexit on the mortgage market is challenging. The slow rise in interest rates predicted over the course of this year will put pressure on household finances, making the certainty of a fixed rate mortgage attractive to many. At least until the Brexit negotiations are complete we can only say that there will almost certainly be an effect so make the right choice for the future based on your specific circumstances.
I hope this is helpful in terms of making an informed decision about re-mortgaging. I am always happy to review your specific circumstances so get in touch if you need some advice.