Buy a house after or before Brexit?

With the prospect of a second referendum on Brexit looking increasingly unlikely, many first time buyers are torn between buying now and waiting until after Brexit. Despite what the experts might say, no one can tell whether prices will rise or fall after Brexit, which just serves to increase the uncertainty. Since the UK voted to leave the EU in 2016, mortgage rates have been on a downward trend and they are showing no signs of reversing. Mortgage lenders have also been softening terms for first time buyers with buyers in particular professions getting as much as 4.5 times their salary. Lenders have also been offering longer mortgages, which have made buying more affordable for first-time buyers. However, while better mortgage terms might seem like a good thing, it has increased the competition in the market place which has led to higher prices. In the end, you could find yourself buying a house for more than you had planned for.


If you are using mortgage rates as your benchmark for whether to buy or not, then you should wait until Brexit, since rates are known to fluctuate wildly. However, you should make that decision based on the kind of property or region where you are buying your house in addition to how long you intend to keep the house. If you have ready cash and are a first-time buyer, you can get some properties with some good discounts. If you can, try to find properties that have been on the market for a while, as such sellers tend to be more willing to offer significant discounts to finish the deal. Moreover, as a first-time buyer, you do not have to pay any Stamp Duty on purchases under £300,000. You could also get a reduction on Stamp Duty for purchases costing less than £500,000. While a no deal Brexit could send the prices plunging even further, as it stands, this is buyers’ market where you can get a good deal even before Brexit.

While it does look like a buyers’ market, what will happen after Brexit is impossible to tell. However, according to experts, things could become really bad if there is a no deal Brexit. According to experts such as Mark Carney, the Bank of England governor, a disorderly Brexit could unleash hell with rising in interest rates, consumer prices, unemployment and the resultant negative impact on the economy. Carney reckons that house prices could see a drop of between 25% and 30% in the worst case scenario. As such, concerns about a potential drop in prices are not unfounded though prices could also rise. However, a rise in house prices will be different than a potential fall. Prices are more likely to rise in the instance of the UK reaching a deal with the EU, though the rise will be gradual. Back in February of 2018 experts believed prices had topped out or would rise by no more than a percentage point. Their analysis was not that far off as prices went up by a margin of 3.1% year on year as compared to the 3.2% from the previous year.

An important thing to note though is the instance of negative equity. A lot of people have got into housing intending to sell after Brexit. In the instance of a hard Brexit which would cause negative repercussions, you may be left with a house that has negative equity. Most sellers will not be willing to part with a house for less than what they go it for. Many of these sellers bought their properties when the prices increased after the results of the 2016 Leave referendum. With many sellers unwilling to sell at negative equity, the market will slowly but surely recover over time. Low prices in the markets will also increase demand and with a shortage of houses, prices will start rising once again.

There are many experts and business analysts with different theories on how housing prices will be impacted by Brexit. The one thing that everyone seems to agree on is that there is a lot of uncertainty and that it is impossible to know for sure what will happen to house prices after Brexit. Ultimately following your judgment could just be what you need to decide whether you should buy before or after Brexit. If you have finally found a house you love at the right price why not just buy it before someone else does. If you intend to live there for the long term, then whatever form Brexit takes should not bother you so much. On the other hand, if you are not in a hurry, then waiting to see how Brexit unfolds may be the best option. This also applies to persons who need to buy and fix a property before returning it back to the market for profit. Still, waiting can cost you more in case Brexit does not cause the significant disruption that experts predict.