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100 days since Brexit result: cheaper mortgages and stable house prices

More deals for first-time buyers and remortgagers, too

Record-low mortgage rates are currently on offer to first-time buyers and remortgagers

Which? research has found that the number of mortgages on the market has increased by 13% in the 100 days since the EU referendum result was announced on 24 June.

At the end of September there were 5,366 mortgage deals available, compared with 4,736 in June.

And despite pre-referendum fears that inflation could lead to pricier mortgages, deals have actually become cheaper following the Bank of England’s decision to cut the base rate in August.

The average mortgage rate on offer fell from 2.99% at the start of June to 2.85% at the end of September, according to Which? analysis of Moneyfacts data.


More first-time buyer mortgages and remortgage deals

Not only have rates dropped, but availability has increased for both first-time buyers and those looking to remortgage.

At the end of September there were 245 deals available to first-time buyers with 5% deposits, seven more than in June. The number of 80% mortgages available to first-time buyers increased from 516 in June to 609 at the end of September.

Furthermore, the interest rate on 95% mortgages for first-time buyers has dropped by 0.13 percentage points to 4.14% since the Brexit vote. The average first-time buyer rate on an 80% mortgage has decreased by 0.1 percentage points to 2.84%.

Existing homeowners are also seeing more and better deals made available to them. The number of 60% mortgages available to those looking to remortgage increased from 345 in June to 421 in September, and the average rate decreased by 0.07 percentage points to 2.23%.


Tracker mortgages vs. fixed-rate mortgages

The Bank of England’s decision in August to cut the base rate means that a subsequent increase is unlikely in the short term.

In fact some analysts have speculated that the base rate could fall further from its current record low of 0.25% to 0.1% by the end of the year – so if you’re looking to buy a property or remortgage soon, this may make a tracker mortgage seem like an attractive option.

However, we found that the average rate available on a tracker mortgage deal has actually increased by 0.05 percentage points since the Brexit vote, to 2.23%.

Fixed-rate mortgages, meanwhile, are slightly pricier at an average 2.84% – but this type of deal may suit you better if you’d like the certainty of knowing what your repayments are going to be for the duration of the mortgage term.

  • Mortgage types – find out the pros and cons of the different types of deals

What’s happening to house prices?

It’s still quite early to tell what’s happening to house prices in the wake of the Brexit vote, but they certainly haven’t significantly dropped as some experts thought may happen. While some regions have seen small decreases, prices appear to have remained relatively stable at a national level.

We took an average from three of the biggest sources of house price data – the Halifax and Nationwide Price Indices, which both cover the whole of the UK, and the Land Registry, which covers England and Wales – and found that between June and August the average house price increased by 1.6%, from £211,231 to £215,008.

The graph below shows average house prices according to all three sources until August. At the time of publication, Nationwide was the only one to have released September figures.

In terms of activity levels, the number of property purchases increased from 101,840 in June to 109,630 in August, according to data from HMRC.

However, the property market is notoriously seasonal so looking at year-on-year transaction figures is often more helpful. Comparing buyer numbers in August 2016 with those in August 2015 we found a small increase of 0.14%.

Should I wait to buy or sell my house?

No one can predict with any accuracy what is going to happen to house prices in the coming months. Early data suggests that there hasn’t been a price crash as some thought may happen; nor has the number of people buying or selling homes dropped. For now it largely seems to be ‘business as usual’ for UK property.

Rather than trying to second guess the market, base your decisions on your personal circumstances: if now is a good time for you to move, don’t hold off based on what might or might not happen to house prices.

If you need a mortgage to buy or move home there are plenty of deals on offer, and mortgage rates continue to be available at record-low levels.

David Blake, principal adviser at Which? Mortgage Advisers, said: ‘In a complex property market it’s important to get yourself into the best possible position before applying for a mortgage. An independent mortgage adviser can help with this and guide you through the steps you need to take in order to give yourself the best chance of success.’

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