Impact of Brexit on first time buyers

The never-ending saga that is Brexit has taken its toll on most of us in some way, even if it’s just that we can’t bear to watch the news any more. But for people waiting to buy a home it has been an even more frustrating time.

The commentary about Brexit and property prices has been pretty negative ever since the referendum. As the threat of a No Deal Brexit loomed in the autumn of 2019, things were looking even worse for the property market. Last year the governor of the Bank of England, Mark Carney, gave a worst case scenario of property prices crashing by 25 to 30 per cent.

This doom and gloom has led some first time buyers to keep their house buying plans on hold. But it’s now been three and a half years since the referendum and we still don’t know when, or if, Brexit will happen.

Sales after Brexit

Interestingly, house sales actually went up in 2017. People recognised that it would be a while before Article 50 was revoked, so they took the plunge to buy. It looks as though this might have been a wise decision – prices steadily increased through 2017 and 2018. But the trend stalled in September, when various market commentators reported that houses prices fell for the first time since 2010.

This was of course because No Deal was looking like a very real possibility and the UK was set to leave the EU on 31 October. Yet our departure was delayed again! It’s now scheduled for 31 January 2020.

What’s next?

The next milestone on the very unpredictable Brexit journey is the general election in December. At this point it is impossible to guess whether we will leave Europe in January, or even whether Brexit will happen at all.

So where does that leave the poor first time buyers? Should they continue to wait and see, or take the plunge?

Options for the first time buyer

Unfortunately there’s no simple answer, and people will need to consider their own personal circumstances before making any property decisions.

The best advice in buying any property is to avoid taking unnecessary risks. One way to reduce the impact of property price changes is not to over-stretch your budget. It can pay to buy a lower value house that needs work rather than take on a large mortgage for the perfect home.

A lot of first time buyers swear by this approach. By taking on a property that needs some investment, you can create a home that suits both your style and your needs. It can be very rewarding to turn am outdated house into an appealing modern property, and it doesn’t have to cost a fortune. Take a look at our New Home page for inspiration.

In the meantime, let’s all keep our fingers crossed that Brexit uncertainty will come to an end sometime soon!

This article does not necessarily reflect the opinions of the editors or management of EconoTimes.