Alan Cleary

Deal or no deal, don't let Brexit derail your customers' moves



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Is anyone else fed up with hearing dire warning after dire warning on Brexit? It feels as though not a day goes by without the front pages revealing yet another politician has walked out over the Brexit negotiations.

One retailer or another threatening to up sticks to Europe if Theresa May can’t get her government together, air traffic control telling us all flights will be grounded or doctors claiming we’ll run out of medicine.

Brexit has dominated the debate in newspapers, television, Westminster and dinner parties for more than two years now and, deal or no deal, it’s taking its toll on the UK. The reality is that – regardless of whether May gets her soft Brexit or Boris Johnson gets his hard divorce – public uncertainty about our future economic resilience has become entrenched. This is showing in the housing market – often a good measure of public sentiment. While house prices have remained pretty flat on annual measurements, we have seen the odd monthly fluctuation across several of the indices. London and the South East particularly have seen some softening in values. 

Falling house prices are feared by consumers, but over the past 10 years, the fear has been pretty unfounded in most areas (there are notable exceptions to this rule – Northern Ireland being the obvious example). This is largely down to two things: the chronic lack of supply of new homes being built in the majority of England and Wales and people’s unwillingness to move, crystallising a perceived slump in the paper value of their home and incurring an unwanted stamp duty bill on the purchase of their next home. 

The net result has been a severe lack of stock for sale. The latest RICS survey showed new sales instructions rose in June, but new buyer enquiries remained flat. The stock of unsold homes per surveyor edged up, from 42.5 homes in May, to 43 in June. But the latest reading is still close to a record low. This shows in the mortgage lending figures too, where growth in residential lending has largely come from remortgaging. Meanwhile, equity release lending continues to strengthen, suggesting many older homeowners are choosing to extract capital from homes to make improvements or changes to their existing properties rather than downsizing and being hit with a whopping stamp duty bill. 

At Precise Mortgages, we’re always thinking about what customers need and how to provide brokers with the best range of tools to service those needs. We’ve been lending up to 75% LTV on unregulated bridging for a while and we believe that even this is still a sensible and fairly conservative LTV. That’s why this month we decided to up our maximum LTV on regulated short-term deals as well. The purchase side of the housing market is stuck in a limbo that is only being exacerbated by the indecision our politicians have shown throughout these Brexit negotiations. But life goes on regardless and we don’t believe ordinary people should lose out when it comes to something as important as where they live as a result. 

I’m still fed up of hearing about what may or may not happen next March if parliament ever manages to agree a deal. But at least we can provide a degree of certainty, however small, for those whose financial plans would otherwise be derailed. 

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