After the referendum on 23th June, there is a huge dose of uncertainty of what will be future of the property market in the UK, particularly in London.
Speculations and predictions can be seen or heard every day on the media that house prices in London will drop down between 20% – 40% in the next few years. Many investors and buyers face the difficult choice to buy a property now or better wait until there is more clarity on the market, as properties can lose their initial high market value and mortgage interests may rise up. However, many local and national property agents stay positive about the short and long-term prospects of the housing market. They believe that despite of what will happen, the market will stay relatively stable and will not collapse.
Experts say that house price growth in London is beginning to slow after a few years of steady rise. This is good news to potential homeowners in the capital city as they will need to declare less income to obtain a mortgage and more people will be able to afford buying an own house.
At first, house prices will remain unchanged but not long after it, the market will start to recover. Demand, which is the main underlying factor of the property market will not just disappear. It will simply help the property industry to quickly gets back to normal. It is true that even if the immigration is controlled, British population will continue to grow and will outreach the current property building level. The next few months may be a great opportunity for first time buyers to purchase a new home, as they would take advantage of the current situation and reap the benefits until the market recovers.
Broadly, experts expect mortgage interests to stay relatively the same, even the base rate could be further reduced than increased to stimulate the economic. The most common scenario of increasing the interest levels is if the UK goes into inflation and the pound loses its value.
However, nothing can be said for sure because the property market is always difficult to predict. While there is a slight opportunity for the house prices to continue dropping down in the short-term, this is unlikely because of the lack of supply. It seems that properties remain solid investment, especially if it’s done for the long-term.