BREXIT BEGINS: What could happen to Pound, house prices 

As the UK hits the Article 50 trigger The Sun take a look at what could happen to the pound, house prices and interest rates :

AS Brexit begins and the UK officially starts the process of leaving the European Union there is much uncertainty about what will happen.

One of the biggest concerns is how Brexit will affect household finances.

Prime Minister Theresa May today told MPs that doubters should “look forward with optimism.”

But with negotiations taking up to two years, we take a look at how the pound, house prices and interest rates have reacted since the vote to leave the EU in June.

We also speak to experts about what their predictions are for the future.

How will Brexit affect the pound and currency?

Since the vote to leave the European Union the pound has dropped by 12 per cent against the euro and 16 per cent against the dollar.

Earlier today, the pound dropped against the euro and the dollar ahead of Article 50 being triggered before clawing back some of the ground it had lost.

Ian Strafford-Taylor, CEO of travel money expert FairFX, said: “Even though negotiations for Brexit are likely to last up to two years, the official triggering of Article 50 hails uncertainty which has a tendency to rock rates as currency is very sensitive to market volatility.”

But what about the future? It’s hard to predict, Strafford-Taylor told The Sun Online.

He said: “Predicting currency movements is near impossible so the only thing that consumers can do is be proactive when it comes to travel money.

“The key is to plan ahead. If you’re happy with the rate on offer, buy your currency now. That way you’ll guarantee how much you get for the pound even if you’re not travelling imminently.”

How will Brexit affect interest rates?

The UK interest rate – known as the base rate – is set by the Bank of England for lending to other banks and it used as the benchmark for interest rates generally.

It may affect interest you pay on loans, or receive on savings accounts. The BoE’s monetary policy committee (MPC) sets rates and has said previously that it’s in no rush to push them up.

But many economists have said that rocketing inflation could put pressure on the BoE to take action and put up rates.

Hannah Maundrell, editor in chief of money.co.uk, said: The MPC are all too aware what that would mean for fragile household finances and so it’s likely any upward movement will be slight, gradual and carefully timed.

“Mortgage rates may rise independently though so if you’re on a standard variable rate deal it’s worth checking if you could free up cash and protect yourself against possible rate increases by locking into a low rate, long term fixed rate deal now.”

How will Brexit affect house prices?

There so many house price surveys that it’s hard to know which one to trust.

In general, in the months after the UK voted to leave the EU, house price growth has slowed but there hasn’t been a massive impact.

We asked three experts for their views on what could change in house prices as the UK leaves the EU.

Simon Collins, from John Charcol, an independent mortgage advisor, said: “I doubt we’ll see a house price crash. The British housing market is still seen a good investment.

“Brexit has not managed to deter the UK property market. It’s bulletproof and teflon coated
Russell Quirk, EMoov

“The only reason there would be a house price crash is if a lot of people defaulted on their mortgages, causing a surge in cheap houses on the market.”

Some areas have fared better than others. We are starting to see house prices growing faster outside of London.

Russell Quirk, founder and CEO of eMoov, said: “Brexit has not managed to deter the UK property market. It’s bulletproof and teflon coated.

The only caveat is the prime London market that was overheated before and has been negatively affected by major Stamp Duty changes.”

While Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: ‘The housing market has held up much better than everyone feared but the undercurrents of uncertainty are still there with transactions steadily falling since the vote.

“Inevitably this is having an impact on the market with prices softening, particularly in London which has also been affected by the increases in stamp duty and unsustainably high prices for a long time.”

In terms of a mortgage, if you’re worried about Brexit then experts advise going for a long term fix.

This means opting for a five year fix, over a two-year fix for example, as this will get you past the negotiation period and the UK’s exit from the EU.

Source: The Sun – BREXIT BEGINS How will Brexit affect the pound, house prices and interest rates?

Read also: All you need to know about Article 50 and the Brexit process

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