Britain has decided to leave the EU after 43 years. Whether you were an in or an out this is a huge thing for our Country. 48% voted to remain and 52% voted to leave.
The challenge now is how the leadership bring us through this huge change.
London, Scotland and Northern Ireland backed staying in the EU.
UKIP leader Nigel Farage hailed it as the UK’s “independence day” but the Remain camp called it a “catastrophe”.
The pound fell to its lowest level against the dollar since 1985 as the markets reacted to the results.
After a hard-fought and controversial campaign, the results are finally in and the UK will now begin the process of leaving the European Union. While the direct legislative impact on the UK housing market from leaving the EU should be minimal (EU directives and regulations hold little power over much of the UK housing market), it is the broader, indirect, economic impacts that deserve attention.
Nick Marr from TheHouseShop.com comments that their main focus has been the possible impact on the UK’s landlords. Leveraged landlords who have a mortgage on their rental property could be most at risk. This is because our withdrawal from the EU could result in a weakening of the Pound against the Euro, which in turn would push up inflation. Higher levels of inflation will result in interest rates going up in the long-term, increasing the cost of borrowing and therefore reducing demand in the Buy-To-Let market.
Another potential danger of an eventual interest rates rise is the impact on tenants. Many landlords are already considering raising rents on their tenants to cover the costs of new Government legislation and fewer tax breaks, and an interest rate rise could force landlords to push rents up even further.
This then becomes an issue not only for BTL landlords, who need to cover the costs of higher mortgage payments, but also for the millions of tenants who will likely bear the brunt of these costs through increased rent payments.
Of course, a long term interest rates rise will also affect mortgage-holding homeowners, who have become accustomed to the particularly low and stable interest rates that they have enjoyed in the last 7 years. Many older homeowners will remember the times when interest rates reached levels approaching 15%, but for those too young to remember, an increase to anything approaching these levels would seem unthinkable.
We will have to wait and see how these potential issues develop over the coming weeks, months and years, but it is safe to say that we are now entering an interesting time for the UK market.”
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