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| First-time buyers would benefit from Brexit, says Moody's | First-time buyers would benefit from Brexit, says Moody's |
| (about 3 hours later) | |
| First-time homebuyers in the UK would benefit from a vote to leave the EU, according to a leading ratings agency. | First-time homebuyers in the UK would benefit from a vote to leave the EU, according to a leading ratings agency. |
| Moody’s said a fall in house prices triggered by a Brexit would make it more affordable for people trying to get on the property ladder for the first time. | |
| “First-time buyers would benefit from lower competition for housing, as house price and rental inflation would slow down if immigration is curbed,” said Gaby Trinkaus, a vice president and senior analyst at Moody’s. | |
| Trinkaus added that whatever the outcome of next month’s referendum, the outlook was picking up for first-time buyers in the capital. | |
| “Regardless of the referendum vote, the ambitious affordable housing agenda for London following the mayoral election will help those looking to get on the housing ladder,” she said. | |
| Last week, Christine Lagarde, managing director of the International Monetary Fund, said a vote to leave the EU at next month’s referendum could cause a house price and stock market crash. | |
| “We have looked at all the scenarios. We have done our homework and we haven’t found anything positive to say about a Brexit vote,” she said. | “We have looked at all the scenarios. We have done our homework and we haven’t found anything positive to say about a Brexit vote,” she said. |
| Estate agents also claimed thousands of pounds could be wiped off the value of UK houses if Britain votes to leave the EU. | |
| Prices in London could fall by as much as £7,500, while homeowners in the rest of the country could lose £2,300, the National Association of Estate Agents said. | |
| However, Moody’s suggested Brexit would be positive for cash-strapped first-time buyers who are currently priced out of the market. | However, Moody’s suggested Brexit would be positive for cash-strapped first-time buyers who are currently priced out of the market. |
| UK prices rose in March at their fastest monthly rate since 2004, the latest official figures showed, boosted over the month as buy-to-let investors rushed to complete purchases ahead of a stamp duty rise in April. | UK prices rose in March at their fastest monthly rate since 2004, the latest official figures showed, boosted over the month as buy-to-let investors rushed to complete purchases ahead of a stamp duty rise in April. |
| Related: Rents and property values would drop after Brexit, say landlords | Related: Rents and property values would drop after Brexit, say landlords |
| House prices increased 2.5% over the month, taking the average price of a home to £291,820 according to the Office for National Statistics. | House prices increased 2.5% over the month, taking the average price of a home to £291,820 according to the Office for National Statistics. |
| Moody’s said London’s property market could be more affected by Brexit, and that landlords could struggle to pay mortgages because of falling rental demand. | Moody’s said London’s property market could be more affected by Brexit, and that landlords could struggle to pay mortgages because of falling rental demand. |
| Trinkaus said: “A decline in rental demand could hit landlords’ ability to pay their mortgages on buy-to-let properties if London becomes less attractive to foreign nationals.” | |
| Moody’s also warned that self-employed people in Britain would be more at risk than employees from fluctuating pay in the event of Brexit, potentially affecting their ability to make mortgage repayments. | |
| The agency said that should a vote to leave the EU have a bigger negative impact on the UK economy than it is expecting, mortgage arrears would increase among self employed borrowers. | |
| “The highest risk would apply to those borrowers with additional risk characteristics such as poor payment history, high loan-to-value or interest-only features,” Moody’s said. | |
| It added that London had the highest concentration of self-employed people in the UK, at 17.3% in 2014. | |
| The number of self-employed swelled in Britain during the financial crisis, as many people who could not find permanent work or sufficient hours opted to work for themselves instead. | |
| Self-employment reached the highest level since records began 40 years ago, with the proportion of the total workforce self-employed rising to 15% in 2014 – or 4.6m people - compared with 13% in 2008, and 8.7% in 1975. |