On Thursday, 4th August 2016 the Bank of England lowered the base rate to 0.25%, this is a record low level and the first change since 2009.  This is in response to the economic forecast for the latter parts of 2016 being in a negative position.  The Bank said "growth will fall dramatically, announcing the biggest downgrade to its growth forecast since it started Inflation Reports in 1993".

The decisive decision to lower the rate again will hopefully stop the economy dropping into recession.  In recent months the Lincolnshire market has responded well to the decision to leave the EU.
There is mention of an even lower 0.1% rate as an option should it be required.

Moving forward with the new record low interest rates, mortgage applications are set to rise.

Andrew Harrod, Mundys In-House Mortgage Advisor, says “mortgage rates are already incredibly low, so if you are looking for a deal and you qualify, why wait.  Now is an excellent time to buy, don’t hold back”.

As the rates drop savers are set to earn less on investments in banks so property is a very attractive option.

We have properties that are currently producing returns of 6% and 7%, far higher than saving accounts, so property continues to be a sound investment.

There will also be a new scheme, the Term Funding Scheme, which will provide extra finance to banks to encourage them to pass on the cut in interest rates to businesses and consumers.

Quantitative easing is a way the Bank of England buys Government and business debt, allowing more money for the markets to be available, this is set to rise to 70 billion.

The Governor of the Bank of England has said that banks have "no excuse" not to pass on the lower borrowing costs to customers and will be charged a penalty if they fail to do so.

Following on from my last blog on leaving the EU, our advice here at Mundys is to keep moving forward with your plans.  Life goes on, families grow, people change jobs and situations and now is the perfect time to buy the house of your dreams.

Please don’t hesitate to call myself or the sales and lettings team if you want any further advice.  Andrew Harrod is also available to discuss your mortgage requirements if you are considering buying your new home or considering a purchase as an investment.

On 23rd June 2016 the people of Lincolnshire and the whole of the United Kingdom voted in the historic landmark referendum to vote to stay within the or to leave the European Union.

Polling Stations closed at 10.00 pm on Thursday, 23rd June 2016 with Emma Bowey, one of Mundys’ negotiators, casting possibly one of the last votes within Lincolnshire at 9.58 pm.

The Country either stayed up to watch the results unfold or woke to see a majority wanting to leave the European Union. In Lincolnshire, on average, 74% of the electorate voted, with over 60% of people voting to leave the EU and 34% of people voting to remain.  Some of the highest levels of leave votes within the whole country were in Boston and the East Lindsey District in Lincolnshire with a massive 74.5% leave votes.

So what does Brexit mean for Lincoln’s Housing Market?

Now we have voted to leave the EU, are house prices really going to fall? Here's what the experts say….

The International Monetary Fund (IMF) has warned that Brexit could cause a sharp drop in house prices. This was on the expectation that the cost of mortgages would rise.

The Treasury has said house prices could be hit by between 10% and 18% over the next two years, compared to where they otherwise would have been. This would be good news for first-time buyers, but not so great for existing homeowners.

The National Associate of Estate Agents (NAEA) believes house prices in London could see the biggest change, losing up to £7,500 on average over the next three years, compared to where they otherwise would have been. Elsewhere, it said values could fall by £2,300. But since it expects prices to continue rising anyway, this means a slower rate of increase, rather than a fall in real values (see table below).

And again, if the Bank of England were forced to cut rates, all these projections would be wrong.

How might the EU existing affect housing prices:

Source: NAEA/ARLA/CEBR

So what about Lincoln?

Ever since the last recession the housing market has steadily recovered with house prices increasing year on year since 2009.

We are confident here at Mundys that the Lincolnshire market is strong and resilient to massive changes. Lincolnshire has many things going for it, with a growing University, a vibrant Modern City steeped in history and the recent renovations of the Castle and the Magna Carta provide an influx of tourism.

With continued investment in our infrastructure, with projects like the South East Bypass and the new Transport Hub, things are looking up for Lincoln.

The Bank of England released a statement immediately on the 24th releasing £252 billion to the mortgage markets. The Bank of England have also confirmed they will look at interest rates to stabilise any problems should they occur.

All of the above together with the fact that house prices are low compared to other areas of the country, would lead us to predict that whilst there will obviously be some uncertainty over the next few months, we am convinced that there will continue to be high demand for property in and around Lincoln and the market will recover.

We believe that property within Lincoln remains a fantastic investment and, with extremely low interest rates, we are convinced that now is a good time to sell or buy.

If you know it’s the house for you, go for it. Do not put your life on hold for the next 2 to 3 years. Nobody knows what is going to happen in the future anyway. Property is still the best form of investment.

If you have any questions about property after Brexit then get in touch

Call Chris and our team on 01522 510044 or email Chris.Laughton@mundys.net for honest, expert and friendly advice.

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