Big Bytes

Harder to get a housing mortgage abroad if UK leaves EU

Some market watchers believe interest rates will fall because the Bank of England will be forced to stimulate the economy in the event of a leave vote. Economists at JP Morgan forecast borrowing costs could fall to zero by August if there is a vote to leave. In the run-up to the vote, five- and 10-year fixed-rate mortgages have been at their lowest ever level. This is because government bonds are seeing a drop in yields – or the interest rate they pay out to investors – as the City searches for havens for its cash in the event of a leave vote. If bonds become a hot ticket among investors and rise in price, then yields fall.
Ray Boulger, of mortgage brokers John Charcol, said the decline in yields has yet to be passed on fully so a remain vote should not necessarily lead to a sharp increase in mortgage rates. A vote to leave could cause the pound to plummet. In February, investment bank Goldman Sachs claimed the value of sterling could fall by up to 20%.
If such predictions are correct, holidaymakers heading to Spain and other eurozone countries might find the pound has less spending power than it did last summer. Last August £1 bought about €1.42; on Monday it was about €1.29, though that’s better than €1.26 last week. Anyone worried about the pound plunging, can buy currency now or load money on to a prepaid currency card. Money in bank accounts, savings accounts and cash Isas is protected up to the value of £75,000 by an EU directive. There is no need to withdrawcash from any bank or building society covered by this deposit guarantee, whereas cash stored under the mattress is rarely insured.
The Bank of England is likely to enter the market to provide liquidity – making sure banks have enough cash – if an exit vote prompts market mayhem and investors attempt to pull cash out of the UK. Indeed, the bank has been offering money to institutions via three pre-announced money market operations, where funds are offered to UK banks.
A range of organisations have predicted a Brexit vote would lead to a fall in property prices, and there is anecdotal evidence that many buyers and sellers have put their plans on hold until Friday at least. Zoopla, the property website, has warned that Brexit would reverse the gains in house prices made over the past five years, citing Treasury research.
For investors looking to make money out of property, this will be bad news. But homebuyers should look to the longer term. UK housebuilding is not keeping up with demand, and unless mortgage rates rocket, that could mean upwards pressure on prices resumes once the dust has settled. Source: theguardian.com

Leave a Reply

You may also like:

Generic

CREDAI Hyderabad checks into a new Office

The new office to have dedicated space to focus on Skill Development for members and their technical and marketing work force for enhancing efficiency & effectiveness. Hyderabad 28th May 2017 – CREDAI Hyderabad formally announced the launch of their New Office at Lumbini Mall, Road No 2, Banjara Hills . The new premises was inaugurated by Sri Etela […]

Read More
Generic

3 BHK Apartments in Velacherry, Perungudi, Chennai

Falling Waters, luxury apartments is the newest project in Perungudi, OMR. This project consists 2, 3 and 4BHK apartments ranging from 1434 sq.ft to 3365 sq.ft, giving a spacious home. The terrace gardens, auditorium, mini theatre, gymnasium and infinity swimming pool are the highlights of Fallling Waters. Phone: 81445 99599 / 95001 21234 Address: Falling […]

Read More
Generic

Gated Communities in Bangalore

Gated Community Development Gated Community Development is a relatively recent concept in real estate usage. Its name owe its origin to the integrated housing colonies which are surrounded by perimeter fencing and with watch and ward personnel manning the gates and regulating the entry and exit of outside visitors with no place for the visitors […]

Read More