On 31 December, the UK formally severed its ties with the EU and a new era for the country dawned. But what effect will Brexit have on the property market – and your mortgage?
In November 2018, Bank of England (BoE)’s November Financial Stability Report predicted, in a worst-case scenario, that property prices could plummet by over 30% following Brexit, pushing many mortgage holders into negative equity.
The COVID silver lining?
The Brexit transition period, however, ended up coinciding with the pandemic, the impact of which has been so large that experts believe it will exert a much larger influence than Brexit on property prices.
In fact, pent-up demand following the spring 2020 lockdown, combined with the Stamp Duty tax break, caused house price growth to reach a six-year high at the end of 2020.
What about my mortgage?
Again, the pandemic is likely to have a greater impact than Brexit on interest rates in 2021, with the BoE base rate expected to remain low as the economy recovers. T
herefore, mortgage finance is likely to stay competitive for borrowers this year. First-time buyers will also welcome the return of high LTV mortgages, with 90% LTV deals almost doubling between 1 December and 1 January.
Your home may be repossessed if you do not keep up repayments on your mortgage
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(Your home may be repossessed if you do not keep up repayments on your mortgage)
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