As the UK population votes to leave the EU, we take closer look at what Brexit means for doctors mortgages.
House prices
Estate agents have warned that buyers and sellers face a period of uncertainty when it comes to house prices post Brexit vote. Before the vote took place, the Treasury warned of a huge property price plunge, contradicting mortgage lenders reports of steadily increasing property prices.
Any fall in property prices would of course excite first time buyers, such as the likes of medical students and junior doctors. Locums, GPs and consultants who are looking to remortgage or purchase second homes would also benefit from a lower purchase price, especially due to the recently increased stamp duty tax levy on second homes.
This is a tough one to judge, but as an indicator, swap rates (which are often the forerunner to fluctuations in mortgage rates) have been falling since the vote was cast to leave the EU.
If doctors mortgage rates follow suit, then doctors looking to mortgage or remortgage a property will benefit from lower monthly repayments as interest rates fall from their already historic low.
A meeting of The Bank of England’s Monetary Policy Committee is due to take place in July. Since the vote to leave, it hasn’t made any emergency change to the Bank rate which is currently at its record low of 0.5%.
There were claims that Brexit would detract foreign investors from investing in the UK, resulting in soaring interest rates but there is no obvious reason why this should be the case.
After Brexit, the UK will no longer be obliged to fulfil the terms of the EU’s Mortgage Credit Directive. This could stop some mortgage regulation and potentially make it easier to get a mortgage, but the Government is likely to retain tight rules on borrowing in the hope of preventing a repeat of the mortgage lending craze that caused the 2008 recession.
