This week has been busy… and I don’t think that’s going to change!
One thing that I think is essential over the next few weeks though is to make sure people’s questions are answered about how Brexit will affect property and the market over the coming months.
Following the Brexit result
These are the kind of questions I’ve had so far and have answered below. Bear in mind my answers can only be based on what’s happened in the past and how people have reacted and the information I have at the moment. There is no crystal ball I’m afraid and so much of what happens to property prices is down to consumer confidence; it’s tough to model – which is why so many property price forecasters get it wrong!
So, here are the queries I have received so far:
See below for answers to:
Should I sell now or wait for things to settle down?
The reality is if you try to sell now, it’s summer time and often people are more concerned about holidays and enjoying the sunshine (hmm) and sporting events than buying a property!
As a result summer isn’t always the best time to put property onto the market.
For me, if I was selling, I would probably hold on until September and see if markets settle and confidence returns to the market.
The benefit of this is that if buyers hold off making offers over the summer and sellers hold of putting their homes on the market, it means buyers may see properties they liked being sold but little else to replace it, which may encourage them to get a move on and make offers in future - and even potentially end up competing prices upwards.
However, if you're looking to sell fast? Read our Selling a Home Quickly Checklist
What’s the risk of waiting to put your property on the market?
The key risk is that prices may fall so if you sell now, you may get more money for your property. However, it also means you are likely to pay more for the property you are buying, so an ideal situation would be to sell now while prices are reasonably good compared with previous years, step off the housing ladder for a while, then step back on if prices fall.
The second downside is there is really only a small window of September and October for sellers; if you don’t sell by the end of October, because November and December tend to be quiet, you may have to wait until next year to sell.
Also at this time, it’s likely we’ll be hearing about a ‘dip’ in the market in the press based on data captured over the summer, which will also include the fall in buy-to-let demand as well as the impact of Brexit.
As such, this might stop people buying until next year.
What should sellers do?
If you need to sell this year, it’s probably better to market your property at a fair price sooner rather than later. If you don’t have to sell this year, it may be worth holding off until buyers come back off holiday in September/October and, if you haven’t sold then, take your property off the market until early next year.
What will happen to rents with Brexit on the way?
Currently rents are rising in line with wages, helped by the fact that inflation is near to zero. However, over the next few years, if we see the cost of living rise due to a poor pound (imported goods cost more) and we have to pay more to go on holiday, it’s likely rents will continue to rise, but many landlords may not be able to increase tenants’ rent much if the cost of living starts to match people’s wage increases.
Looking to rent? Read our Renting Quick Guide
I’m an investor, what’s your advice? Sell, hold, buy?
Well it depends… if you own property currently, it’s probably wise to double-check you are on by far the best mortgage rates you can get as, if prices fall, so will your ‘loan to value’ and, as a result, you may not get the best rates further down the line.
If you are thinking of selling up, it’s probably worth doing that sooner rather than later, although there is a move currently to promote a new tax regime where capital gains tax will be reduced for landlords who sell to their tenants. As such, it might be worth waiting to see if this is brought in as it could save you some taxation.
However, holding on may mean prices will fall more than the tax you may save.
If you are thinking of buying, check out bargains from auctions and directly from sellers who are struggling to sell.
So, overall, no clear-cut conclusions I’m afraid because we can’t predict exactly what will happen. But hopefully now you have enough information to help you decide what’s best for your situation. The key thing is to take expert advice about your particular circumstances from qualified professionals – and not to be swayed or scared by headlines!