There has understandably been a lot of speculation and concern about what may happen in light of last weeks’ referendum result. At One 77 Mortgages it is very much a case of business as usual, and whilst no firm predictions or guarantees can be made, we have deduced the following from what we have seen and heard during the last week.
Financial Markets: True the value of the pound has taken a ‘knock’ against the Euro and the Dollar, but the currency remains comparatively strong and the economy is far more resilient than in the economic downturn of 2008. The UK stock market took a tumble on Friday in the wake of the result, but the prices quickly rallied and are now at a similar level to what they were prior to the referendum. We expect that there will be continued volatility with regards to both, but this is to be expected.
Mortgage and Interest Rates: At present we have not been, and are not anticipating, any significant changes in mortgage rates. We expect mortgage rates to remain largely the same, and if anything we will probably see a further reduction in rates rather than increases. Based on the experience of the last few years we do not anticipate significant changes to the Bank of England base rate. We expect that this will need to be kept low in order to try and maintain economic growth; the only risk of it rising is if the reduction in the value of the pound proves to be inflationary. At present the rate of inflation remains so low that this impact would not be of major concern.
House Prices: House prices are always difficult to predict however we have seen strong house price inflation over the last three years. Whilst there is potential for house prices to fall in the short run, this seems unlikely due to the lack of supply meaning that demand pull price inflation remains likely, although this will probably be at a slower rate than seen previously. Due to the volatility in the financial markets, continued low interest rates and economic uncertainty in the short to mid-term; it seems to us that bricks and mortar remain a comparatively sound investment; especially if bought for the mid to long term.
If you would like to seek further advice with regards to your mortgage and insurance needs, please contact a member of the team on 01225 667177 or by emailing firstname.lastname@example.org in confidence and without obligation.