As the dust settles on Christmas and we ease ourselves into a New Year, now is the perfect time to look ahead further into 2019 and assessing what challenges and opportunities this year may throw at us.
It probably won’t surprise you to know that there is the possibility of a tough economic year ahead (this isn’t a certainty, but as I said – is a possibility). These are the areas that I see as being challenges for the property and mortgage market in 2019.
I’ve detailed them below and with it, I’ve included my top tip for tackling these challenges head-on.
Slow property market:
If you’re looking to sell or buy in the current climate, then you will probably be aware that we’re in the middle of a pretty slow property market right now. The uncertainty around the market has meant that there are fewer properties available for purchase right now.
This problem is compounded when we consider that right now, rather than take the next step on the financial ladder, people are more likely to pour any excess money they have back into improving the quality of the property they have.
So how do you prepare for this challenge?
Obviously, this is quite a challenge if you’re a first-time buyer – chiefly due to the smaller volume of properties on the market.
If you are thinking about moving up the property ladder you have two choices. Either look to make the property as sellable as possible – sorting out those decoration and maintenance problems that have been hanging around, or decide to stay where you are and raise additional capital to make improvements to the property.
In either case, looking to re-mortgage may be helpful.
Interest rate rises:
Obviously, none of us has a crystal ball so it is difficult to know what is going to happen with interest rates as things can and will change over time. Given some of the other factors occurring in the market place right now (particularly Brexit), it is possible that there will be some level of fluctuation in the coming months.
This fluctuation will be more problematic if you’re on a variable rate mortgage or coming toward the end of your fixed term rate. Given that the rates are presently low (the Bank of England base rate is 0.75% at the time of writing), now would be a good time to look at getting yourself into a fixed rate term and get some certainty on your mortgage moving forward.
Consumer lending high:
Going hand in hand with the prospect of interest rate rises, we have the problem of high levels of consumer lending. All consumer lending, be it personal loans or credit cards are debts that have to be serviced. The problem comes when people haven’t managed their finances right, people become reliant on their debts and aren’t able to keep up with payments if interest rates rise.
The best way to prepare for this is to make sure that you are working within your finances, and not spending more than you earn. With regards to your mortgage, make sure you’re on an appropriate vehicle and check with your mortgage advisor to see if it is possible to get a better deal or rate. Then help set up a plan to pay down the debt as quickly as possible with whatever the budget allows.
We’ve saved the biggest challenge for last, and what a challenge it is. Obviously, the biggest challenge around Brexit is the lack of certainty – and this is having an impact on some of the other issues that we have addressed higher up in the article.
The uncertainty is one of the reasons that the housing market is slowing down. This has primarily affected the London property market (and to an extent Essex – due to our proximity to the capital). So, though we won’t know exactly what is happening… it is possible to plan for it.
2019 has the prospect of being a challenging year, but this shouldn’t mean that you put your life and plans on hold. Whilst none of us can predict the future, what you can be assured of is that Chambers Financial Services are a tried and tested, safer pair of hands – here to give you the best advice in an uncertain world.
So if any of the above has struck a chord with you – give us a call today on 01268 744 333, or send us a message below and we’ll aim to help you out.