Though there is still no timeline in place for when the UK might leave the EU, and the politicians still don’t seem to have any idea about what exactly exiting the European Union will mean, the financial implications of Brexit are beginning to be felt by people across the country.
As the property market is a good indicator of the state of the country’s economy, experts have been watching keenly to see how the sector will respond to the Brexit vote. So what exactly has been happening in the buy-to-let market over the past few months and how could this affect your buy-to-let investment?
Falling house prices
In the initial aftermath of the Brexit vote, house prices across the UK did take a small knock. Both buyers and sellers were unsure about how the vote would affect the property market, with some experts predicting an immediate crash following the June vote. However, the crash never materialised and confidence quickly returned to the market. Though the rapid rise of property prices has slowed in some parts of the country, overall, the value of the UK’s property is still on the up, with the trend showing no signs of stopping any time soon.
One big impact of Brexit on the buy-to-let property market has come from the falling Pound. With Sterling hitting record lows in the last few months, it’s been a great time for foreign buyers to invest in rental property in the UK. Particular interest has come from China, the Middle East and the US, with businessmen and companies snapping up Britain’s buy-to-let properties at bargain prices.
Lack of mortgages
According to a report from Moneyfacts, buy-to-let mortgages are being pulled from the market at the fastest rate since 2009. Increased affordability checks and changes to tax rules have lead to many banks withdrawing their buy-to-let mortgages from the market. The hardest hit have been those for buyers with a 25% deposit - previously the minimum deposit required for a buy-to-let purchase - with more than 10% of these mortgages withdrawn in the past few months. This may well lead to a drop in the number of people becoming buy-to-let landlords and could increase the number of potential rental properties on the market.
Until the Government makes some firm decisions about what Brexit will mean for the UK, it’s difficult to know how leaving the EU will affect the buy-to-let sector. To make sure you stay up to date with all the latest news, log onto our site on a regular basis.
To find out more about the local and national property market, or if you would like to chat about anything to do with property investment, give us a ring on Norwich 01603 567804 or send us a message.
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