After weeks of campaigning, the residents of the United Kingdom finally had a chance to have their say. People went to the polls on Thursday 23rd June and voted to leave the European Union.
The result came as a shock to many, especially those who seemed convinced that Project Fear would ultimately win. There are undoubtedly going to be many changes in store in the coming weeks and months. But could mortgage rates for UK buyers actually drop even lower than they are at the moment as a result of Brexit?
Super-low rates could dip lower still
Everyone with a mortgage will know that mortgage rates have been impressively low for quite some time now. The effect a vote to leave might have on mortgage rates has been deliberated during referendum campaigning. However, now the decision has been made, it actually looks as though they could get lower.
Ray Boulger, speaking on behalf of the John Charcol mortgage broker, said there was a possibility more lenders would start bringing in five-year fixed rates that went below 2%. He believed this could happen as early as this week.
The effects of uncertainty
Most commentators agree that while the Brexit result will have brought drama to the markets and to the value of the pound, it is vital that everyone accepts the result and settles down as quickly as possible. Moving on from the referendum is very important, and doing it in a united fashion will help instil more confidence in the markets.
Many people will be watching to see if there is any change in interest rates. While they are unlikely to suddenly start rising as a consequence of the vote, uncertainty will not help at all. If rates stay as they are, low mortgage rates should be a given.
Furthermore, even if changes are seen in the UK housing market, there is no indication of whether these would be good or bad. A lot will depend on how the UK government presses ahead with the move to trigger Article 50, the process by which the country will formally begin its exit from the European Union. Delaying it would cause uncertainty, and that is exactly what the housing market does not need.
Good news for those looking for cheap mortgages?
Many people are already on very low interest rates. However, if a new price war was triggered by the referendum result, there is a chance people could end up with even cheaper mortgage opportunities as a result.
However, buying properties could become a little harder in the near future. Many people may react to the uncertainty surrounding the result by watching and waiting. This would be the alternative to putting their properties on the market and looking to buy elsewhere. It could mean fewer properties are put up for sale and prices could alter as a result.
The one thing we do know is that no one is quite sure what will happen next. So it is heartening at least to know that low mortgage rates are going nowhere in the near future.