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What will happen to Mortgage Rates after Brexit?

After years of debate and delay, Britain is now leaving the EU. Many home owners and those looking to buy properties this year will be asking what will happen to Mortgage Rates and the Housing Market as a result of Brexit?

Adam Nanson, Managing Director at Your Mortgage Expert comments:

“I would love to be able to tell my clients exactly what the future holds for Mortgage Rates after Brexit. However, no one has a crystal ball and we can’t really predict what is going to happen to the financial climate.

“What we always tell our clients, if you are concerned about mortgage rates going up and if you want certainty about your monthly outgoings, fix your mortgage now. There’s a lot of competition in the mortgage market at the moment as lenders fight for customers. So now could be a prudent time to fix your mortgage rate.”

Bank of England Base Rate

Adam continues:

“We can say is that the base rate remains low and currently sits at 0.75% and, correspondingly, this means that mortgage rates are currently low. And, there are some people who predict the Bank of England Base Rate is going to go down again. In fact, more than half of the Bank’s Monetary Policy Committee (MPC) have said they would be ready to cut interest rates from the current level of 0.75% if economic conditions failed to improve after Brexit**.

“So, realistically, few are predicting that interest rates are going to increase any time soon.”

The Boris Bounce

Adam comments further

“Having said that, some people are expecting a boost to the financial markets which is being coined the “Boris Bounce”. This is where the economy improves slightly as a result of the positive feeling following Brexit. Indeed, it is possible people who have been deferring making a decision because of Brexit may finally make a move as a result*. We have several clients for whom we know this will be the case.

“Some experts initially predicted that house prices could fall following Brexit. However, some reports have seem to show that, with the certainty of Brexit definitely now going ahead, the housing market has experienced a “Boris Bounce.***

“In fact, according to Right Move, there were 65,000 properties put on the marketing in January 2020. And, the selling price was 2.3% higher than it was in December and the biggest rise for the same period the website has ever recorded.”

EU Mortgage Credit Directive

Adam concludes:

“One of the biggest changes to the Mortgage Market will depend on whether Britain decides to remain a part of the EU Mortgage Credit Directive. These are strict rules designed to protect mortgage customers, but which have been met with some negativity due to them creating “mortgage prisoners”. This is where people are unable to move mortgages because of strict affordability tests and end up being locked into staying with their existing lender.

“Even if Britain decides to stop adhering to the EU Mortgage Credit Directive, this will take time to implement and therefore won’t happen overnight. So, we shouldn’t expect the rules governing how mortgage affordability is assessed to change anytime soon.

“With hot competition within the mortgage market, it is more important than ever that those looking for a mortgage should shop around for the lowest deal. This can be a laborious task and some of the lowest deals are only available through mortgage brokers, like Your Mortgage Expert.

“We have access to an extensive range of mortgages therefore we can offer the most suitable advice on the product for you and your circumstances. We also deal with the paperwork and the lender, so you don’t have to, saving you a huge amount of time and money.

“So, whether you’re looking to fix your mortgage to protect your payments against the possible future impact of Brexit, or simply want to reduce your monthly outgoings, we can help.”

If you are interested in having a no obligation chat about your mortgage, why not get in touch? We don’t charge anything up front, so by speaking to us, you are under no obligation. We are based in Salisbury, Wiltshire, but we can help you no matter where you live in the UK.

Simply call us on 01722 322683 or complete a contact us form on our website and tell us when it would be best to get back in touch with you.

The information contained within this article was correct at the time of publication. It is intended for information only and does not constitute advice. TenetLime cannot be held responsible for information that was correct at the time of publication but subsequently changes or goes out of date due to changes in legislation. For further information, contact Your Mortgage Expert on 01722 322683.

Please note, by clicking on the link below you will be departing from the regulated site of Your Mortgage Expert Ltd. Neither Your Mortgage Expert Ltd nor TenetLime are responsible for the accuracy of the information contained within the non-regulated site.

*Source: https://www.telegraph.co.uk/personal-banking/mortgages/will-mortgage-rates-go-brexit/

**Source: https://www.theguardian.com/business/2020/jan/24/pressure-eases-on-bank-to-cut-interest-rates-as-uk-economy-improves-bank-of-england

***Source : https://www.express.co.uk/life-style/property/1233708/Brexit-news-House-prices-after-brexit-crash-fall-rise-brexit-impact-property-market

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Your Mortgage Expert Ltd is registered in England and Wales under reference 08924507.

Registered office address: 18 New Canal, Salisbury, SP1 2AQ. The Guidance provided within this website is subject to the UK regulatory regime and is therefore targeted at consumers based in the UK.

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