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Musings from Mallorca. Some on Financial Advice. Some on how to legitimately reduce your Spanish tax bill. Plus some Life Stories from our fabulous Island.

Post Brexit - A Great time to Buy in the UK?
01 August 2016 @ 17:39

Brexit Horror Stories

Running scared in the wake of Brexit? All sorts of horror stories were spread around as the likely result of Brexit. Interest rates will rise, house prices will tumble uncontrollably, the economy will collapse and repossessions will increase.

What has Really Happened?

Two weeks later and what do we have? Sterling falling to £1=€1.16, £1=$1.29 (good news for those of you earning in foreign currency as your income will buy more value in the UK than ever), interest rates are widely predicted to fall to 0.25% at the Monetary Policy Committees meeting tomorrow, house prices are stable if not increasing (due to foreign demand) in London and the South East and stable elsewhere.

The banks and building societies have an appetite to lend which has been further enhanced by the Bank of England’s stance of “doing whatever it takes” to support UK plc. (lowering interest rates, reduction of £150bn in capital requirements for banks thereby stimulating lending to name but two).

As far as mortgage lending and available rates go we have seen Santander, Coventry, TSB and others cut their rates by as much as 0.6% and the majority of lenders commenting that it is very much “business as usual” for lending volumes, enquiries and general sentiment towards property purchase be it Buy-to-Let or Residential.

Add to this the fact that 2, 3, 5, and 10-year fixed rates are at the lowest they have ever been and you have a great recipe for buying in the UK now.

Are you guilty of sitting on the fence because of Brexit?

In our experience a worrying amount of people simply sit on the fence and wait, for what I have no idea. Many in the UK are on the lender’s Standard Variable Rate (SVR) of around 5% when there are 5 and even 10-year fixed rates available at under 3%. At the same time the very same people are sitting on tens of thousands of pounds in savings receiving 1-2% taxable returns. Conservative with a capital C or plain inertia, either way it does not make sense.

When we ask these prospective clients why? They say: mortgages are too confusing, my money is safe in the bank and any other “reason” they can think of for what is in reality, apathy and inertia.

Get off your em.. Fence

Whether you earn your income in a foreign currency or in Sterling it is time to get off the fence and take some Financial Advice regarding your Mortgage, Savings, Investments and Pensions while the going is good.

First Time Buyers

Consider the amazingly low fixed and discounted variable rates available, house prices stable or rising and perhaps a little bit of nervousness from homeowners who are not reading this (especially landlords) and are thinking of selling, makes now a great time to be buying.

Buy-to-Let

The same story applies to Buy-to-Let with the caveat that since the budget changes to Stamp Duty and the increased tax burden resulting from the cut in what can be claimed back as costs. Consider also buying via a limited company structure to save tax.

Re-Mortgages

If you have not looked at your mortgage for a couple of years or more, you are on the lenders Standard Variable Rate or you are coming to the end of a fixed rate deal, there has never been a better time to save yourself money by re-mortgaging now. If you only have 10 -years or so left on your Mortgage consider fixing into one of the low-rate 10-year fixes available.

The Importance of Financial Advice

High Quality, Financial Advice will save you money on your mortgage costs, could reduce your tax burden, and will give you peace of mind that you are doing as much as you can towards your current and future prosperity. A good adviser will also make things as straightforward and easy to understand as possible, removing the perceived “complexity” of Mortgages etc.

Do not sit on the fence any longer, get off and get advice.



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