With the UK skipping out of the EU, after much talked Brexit Vote, the financial situations hit a low. Like many other businesses, the housing market has also been slow during the past couple of months. But, this isn’t the case anymore, as business activities are growing in the current month of August.
Though, overall financial market faced heat from the vote but it is mortgage industry which underwent significant freeze. The number of mortgage approvals reduced drastically after the Brexit vote. Seeing the developments,
the Bank of England cut interest rates by a staggering ratio of 0.25%.
We can suggest that this is solely down to the effects of Brexit as people don’t want to risk their money during these uncertain times. However, the first-time buyers are not agitated over the market developments and as a result they are putting their money in.
During the month of June, first time home buyer activity soared up to 25%.
This is the highest percentage of first time buyers in the last 9 years. The report issued by the Council of Mortgage Lenders also discusses that this is the third-month running in which first-time buyers have been more active compared to borrowers who already own a house.
Careful extrapolation of the on-going market developments suggests that affordability over BTL (Buying to Lending) Criteria will also improve in near future. This means that you will be able to borrow more money compared to what you did in the past.
Despite a slow progress at the moment, these developments suggest that: ·
More people will be applying for mortgage loan ·
Housing market will see stability in near future
Talking more of the rate cut, it has brought the British Gilt Yield below a value of 0.6% which is lowest in the history. Furthermore, interbank rates offered inside London have also carried on their sinking ratios as they have dropped to a value of 0.38%, which is very low.
The reports coming from the Bank of England suggest that interest rates might be cut again during this running year. To cope with the situation, huge names in the UK banking industry are explaining that they will look to pass on the cut. This will result in the closure of branches and removing scores of people from their jobs, in the wake of the rate cut.
But, with positive growth; new potential buyers coming to the fore, the ship of mortgage market can be brought to the shore. Now is the time when businesses and individual buyers will have to be brave enough to make their moves. With proper planning and execution, you can make right investments and help the mortgage market revive, as well.
We know that it is a risky business to put your money into the market when the future is not obvious. But, with our knowledge of the industry you can make a right move which will be fruitful for you in the longer run. Follow our blog for more information.