Since Brexit, there have many different comments in the press about how people feel the market and economy will develop during the next few months and most, unfortunately, have been rather dour.
From my experience of the overseas property and mortgage sector, although some clients have put their plans temporarily on hold, there have been very few outright cancellations.
As I have stated in previous comments once the Brexit vote was known, there should not be any knee-jerk reactions and it will take time for markets to return to normality and further key decisions to be made – such as interest rate setting, Theresa May settling in as PM, exercising Article 50, new Trade deals to be sorted – HOWEVER, there are still opportunities to be sought.
In the most popular countries I deal with (France, Spain, Portugal and the USA), there are clients who are still purchasing, but with the following observations: –
Interest rates continue to remain the lowest they have for many years, with many now choosing to also consider Fixed Rates with terms longer than 5 years, where pre-Brexit Variable Interest Rates or 2/3 year Fixed Rates were the norm.
Although prices may have increased for a Sterling buyer by 10% for those purchasing in a Euro or Dollar Zone, previous cash purchasers or those with a higher deposit are now approaching me with a more specific mortgage request, to cover any shortfall due to the currency exchange changes or shortfall.
For those UK based clients purchasing to rent out the overseas property (and not requiring a mortgage on the new asset), they could possibly benefit from the higher rent to be received when their Euro or Dollar rental payments received are converted back to Sterling.
With the speed of the political changes in the UK and the subsequent impact on the money markets, it is therefore definitely worthwhile in the next few months keeping watch on the overseas property industry and the different mortgage options that could be available.