With Brexit uncertainty reportedly pushing the UK property market to its weakest level in more than six years, it seems that there are a number of sellers and buyers who are taking a ‘wait and see’ attitude.
As we’ve seen over the last couple of years, things can change at any moment, which is why, if you’re thinking of investing in UK property in 2019, it’s important to be prepared.
Credit score is crucial
Unless you’re lucky enough to have a large lump sum sitting in your bank account, you’re probably going to be looking for finance to enable you to buy your investment property.
While there are lenders who specialise in bad credit finance (with some specialising in bad credit mortgages in particular), a good credit score should mean that you will find it easier to get a mortgage.
In essence, a good credit score is a way of demonstrating to lenders that you are able to repay finance (due to your credit history).
As a bad credit score could restrict the number of lenders that it would be worth your while applying to (for example, if you have a County Court Judgement (CCJ), there’s no point wasting your time applying to mortgage providers who won’t lend to those with CCJs), you may find that you do not have access to the best deals. Usually, even if you have a bad credit rating and get accepted for a mortgage, you may end up with a higher interest rate.
Interest rate rise?
Some believe that interest rates could rise in 2019 (this article says it may be towards the middle of the year), which could mean that it may be more expensive to get a mortgage.
Again, Brexit uncertainty means that this is far from a sure bet. According to This is Money, the rates could even be lowered again, depending on what happens.
This means that it’s more important than ever to keep a close eye on any developments and plan as best you can for how they may affect your investment in property.
Could house prices crash?
Back in September 2018, it is reported that the governor of the Bank of England warned that in a “worst-case” Brexit scenario, house prices could fall by as much as 35% over three years.
Obviously, if this were to happen, it could make investing in property in 2019 not particularly attractive, to say the least.
A year of uncertainty
There’s no doubt that there’s always a certain degree of uncertainty as to whether any investment will be beneficial in the long term.
With Brexit day looming in just over 2 months and Theresa May’s deal less than a week away from its vote in parliament, we could be in for a turbulent ride.
Keeping a close eye on any developments and the impact they have on the economy, is highly recommended. In the meantime, ensuring that you have a good credit score before applying for a mortgage, could help you to ensure that you get the best mortgage deal possible.
Author: Estate Agent Networking UK
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