Mortgage Market News

How has Brexit changed the outlook for Buy to Let investors?

This past month has seen the introduction of multiple new monetary policies. From the Bank of England cutting the base rate to a historic low, to the supply of £100bn from the central reserve to shore up any damage to banks’ margins after the base rate cut1.

So what might Mark Carney’s stimulus package mean for Buy to Let investors and second home buyers? For those saving, the outlook is not so positive, but for those looking to borrow there are some great opportunities to be had.

The aim of this summer’s stimulus package is to ease the pressure on borrowers by encouraging banks to continue lending and pass on any cuts that they benefit from.2

Despite uncertainty about the impacts of the Brexit vote, some surveys have suggested that the negative impact on Buy to Let investment has so far been somewhat limited. Research has suggested that investors have not been put off buying more properties to add to their portfolios3.

Investors cited the positive consequences of Brexit on the Buy to Let market as potentially being reduced competition, a fall in house prices and less regulation and red tape. However, there is still much disagreement as to whether or not the UK’s imminent exit from the EU will prove to benefit the market in the longer term.4

Whether or not Brexit will cause a fall in house prices is not certain. We do know, however, that June saw the biggest increase in house prices since the October 20145. The average house price hit £214,000 in June, £17,000 more than in June 20156.

House prices are 8.7% higher than June last year; a statistic that is undoubtedly boosted by Buy to Let investors and second home buyers rushing to buy ahead of the stamp duty increase7.

Whether or not house prices fell in July is still to be seen, with different pictures being painted by various sources. We shall have to wait until later in the year to see the full story.

If you would like to discuss expanding your Buy to Let portfolio or remortgaging your property to take advantage of rate cuts please call us on 020 7519 4985 or send us an email to speak to one of our specialist advisers.

  1. http://www.bankofengland.co.uk/publications/Pages/fsr/2016/jul.aspx
  2. https://www.theguardian.com/business/2016/jul/10/bank-of-england-considers-interest-rate-cut-to-tackle-brexit-crisis
  3. http://www.propertywire.com/news/europe/uk-buy-let-survey-2016081612270.html
  4. http://www.propertywire.com/news/europe/uk-buy-let-survey-2016081612270.html
  5. http://www.cityam.com/247627/yep-house-price-growth-rose-june-but-before-brexit-vote
  6. http://www.propertywire.com/news/europe/uk-buy-let-survey-2016081612270.html
  7. http://www.cityam.com/247627/yep-house-price-growth-rose-june-but-before-brexit-vote

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