Homeowners five step plan after Brexit
What does this mean for your property? If you are a homeowner, here are a few points on how to manage your property’s financial needs.
1. Get acquainted with your mortgage contract and take action.
Find your mortgage agreement and look at the rate you are paying, as well as any tie-ins you are exposed to (this is the time throughout, which it will cost you to leave). If the rate you are currently on is the Standard Variable Rate (SVR), maybe consider locking in to a fixed-rate deal. This will then give you security of payments for a set period of time.
2. Attempt to reduce your loan to value
As no-one can predict what exactly will happen to property prices post Brexit, one thing that is certain, the less you owe against your home the better.
For example, if you have any savings, earning little or no interest, this would be better invested by paying off a lump sum of your mortgage. Check with your mortgage lender to find out what overpayments you can make.
3. Stay calm
An impulse reaction to sell up your property on the back of the Brexit vote could be reckless.
Whilst it will take a while to calm the uncertainty, we have learned from the past that over the long term, property value has risen. In truth, property prices in the UK climbed an unbelievable 276% in the last 20 years, according to Zoopla.
4. Utilise your home
If you find yourself getting into a financial predicament, after the Brexit, there may be actions you can take. For example, the Rent a Room arrangement from the Government means you can now earn £7,500 a year in rental income without paying tax on it.
If you require additional room to grow but can't afford the move upwards, you could extend or improve your home instead.
5. Property prices are comparative
If you are having to sell and move on for life reasons, then do not fret about the consequences.
If your home obtains a slightly lower price, the odds are that you will be charged less for your next purchase.
Regardless of the condition of the housing market and the EU, a good estate agent will market your home as broadly and effectively as possible and get the best price for your property.