Brexit’s opportunities

Posted on September 29th, 2016 by admin

Enness Private Clients was founded in 2007 and on the very day of the launch party, there was a run on Northern Rock and the market ground to a halt. Since then, Enness has gone from strength to strength through the vagaries of the property market. It is well placed to offer UK and international buyers, sellers, investors and developers the benefit of its experience and expertise. Six weeks ago, England and Wales voted to leave the EU causing political and economic turmoil, the likes of which have never been seen. Here’s Enness’ guide to keeping a calm head in this period of uncertainty.

In the immediate aftermath of the vote, the pound plummeted to a 31-year low as the stock markets fell. Then, remarkably, they crept back up without a fuss as did the markets. London-listed shares have already recouped their losses since the vote, with the FTSE 100 recording its best weekly performance since December 2011 and now at its highest level since last August. Of course, given the drop in sterling, it is still under-performing in dollar and euro terms but there is a sense of business as usual in the city once it was realised that the UK’s departure from the EU was not imminent. 

The Brexit vote came at a time when the stamp duty increase in April meant many had already delayed their purchases so the market showed no signs of trauma from the result. It is unlikely that London will suffer in the long run due to the city’s dominance in the world. In fact, it might be a good time to buy, there may be many price opportunities during the uncertainty.

However, if you aren’t looking to buy, then there are some things you can do to make the most of the current situation:

Secure your family home by considering a longer timeframe on a loan (such as five years). This could help protect you from having to refinance in a potentially tough lending market.

Consider your options; fixed rates are low, but the cost of fixing, and accompanying loss of flexibility, can sometimes be high. Easy-switch products and payment caps might be a good solution. With this in mind, keep an eye on interest rates as the Bank of England believes a recession is the biggest threat so it could keep interest rates low – maybe by 2017 they could be zero.

Review your current property holding structure to make sure it is robust. Then consider your finance options. Interest only mortgages have fallen out of favour in recent years but they could still be a good way to keep your cash flow buoyant. And keep an eye on opportunities. For example in 2007, there was a tiny window of low activity that smart investors made use of. Make sure you have the funds and flexibility to react to good investment opportunities. Brexit or not, the UK still has a significant housing deficit.

Finally, lending appetite, liquidity and product choice are currently very high and no one knows what is around the corner. It is a good time to consider your next move and Enness is available to assist with any planning or contingency planning for owners and potential buyers alike.

 By Enness Private Clients

Contact Enness Private Clients if you would like financial advice through the coming months of Brexit uncertainty.