Thanks to the brexit, U.K. home prices may drop soon, according to CNN. If you’ve been looking to move across the pond, this may sound exciting. However, there are still challenges. The U.K. economy is weaker, causing the price drop. While home prices may drop up to 20 percent, banks might be tightening their lending standards.
“Your ability to buy a house at all depends on your ability to get a mortgage. And how much you pay for a house is directly related to how large a mortgage you are able to get,” Paul Donovan, a global economist at GBS in London said. “A drop in house prices is not to your advantage. It’s indicative of the problems you’re facing.”
However, the Bank of England wants to keep things steady. They may continue to lower interest rates and lend. So if you can get a mortgage, you might want to take advantage.
“A property price drop of 10% to 20% makes it a better time to buy than before the fall, if you have mortgage availability and if rates stay low or fall further,” noted Philip Shaw, chief economist at Investec in London.
However, a lower price doesn’t always mean a better deal. Especially in a potentially shaky economy, the home could be losing value too. Or, maybe it didn’t have great value to begin with.
“Be selective, do your research, negotiate hard,” advises Jeremy McGivern, founder of the U.K. property search agency, Mercury Homesearch. “Just because something has had a price reduction, doesn’t mean value. The initial price might just be wrong.”
If you are ready to sell your Miami home and head over to the Europe to take advantage of U.K. home prices, contact a RE/MAX Paradise agent today to list your home. Not quite convinced and want to stay in South Florida? We can help you find your dream home in Miami!