Buying a new home can feel like a rollercoaster ride, with plenty of highs but also a few lows.
Almost a year on from the EU referendum, and with a General Election on the immediate horizon, how confident is the UK’s housing market – and what does it mean for home buyers?
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How confident is the housing market?
March 2017 saw 48,178 loans approved for house purchase, according to the British Bankers Association (BBA), no change year-on-year, while the average approved loan rose to £186,800. House prices fell by 0.4% in April 2017, though were up 2.6% on a year ago.
However, the same month, consumer confidence in the housing market dipped to 37%, the lowest since July 2013, after widespread prediction of a surge in inflation and a fall in consumer spending this year.
This comes even as overall consumer confidence remained on the up, with a sixth consecutive month of spending increases.
What do the experts predict for the UK housing market?
Some experts suggest that a time of such economic uncertainty is bound to have an impact on the housing market.
Zoopla CEO Alex Chesterman is cautious about seeing growth in the property market in 2017, and said: “Buying a home is one of the biggest and longest term decisions that people make so they tend to hold off making such important decisions in times of heightened uncertainty.”
According to John Perry, of 2017 UK Housing Review, more houses need to be built regardless of any changes in immigration policy after Brexit – the current target, set before the referendum, is 227,000 homes a year up to 2024. He also suggests that most non-British EU citizens tend to rent in the private sector, so that it is the area that is most likely to be hit.
It’s arguable that the fewer houses being built, the more the chance that those in-demand properties will be more expensive, especially for first-time buyers.
Nationwide’s chief economist Robert Gardner agreed that uncertainty makes it hard to predict the prospects for house prices, but added: “Low interest rates are expected to help underpin demand while a shortage of homes on the market will continue to provide support for house prices.”
Will house prices go up or down?
Uncertainty about the next 12 months, and the effects on the economy, could cause the market to slow down as buyers and sellers mull over what to do next.
The economy is the major factor on the housing market, so if the pound continues to struggle in 2017, it may affect house prices negatively but if things start to improve, house prices could rise.
Investing in property to make a profit – rather than just to have a long-term place to live – is always a risk. So, it’s important to make sure that you don’t borrow more than you can afford, and try to find the right mortgage with the best rate.
What to do before applying for a mortgage
Whether you’re planning on buying your first home, stepping up to a bigger home or remortgaging, Experian’s tips can help you feel financially prepared & confident ahead of your mortgage application.
- Check your Experian Credit Score to help you understand how lenders may view you
- Try not to miss credit payments
- Try not to apply for other credit in the six months before you apply for your mortgage
- Manage credit accounts well
- Register to vote at your current address
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