Today we all woke up to the announcement that Britain has voted to leave the European Union. The historic referendum saw a huge turnout of 72.2% registered voters go to the polls to make their views heard. It was always predicted to be a close call with many believing that remain would snag the victory but ultimately, leave won with 51.9% of the vote.
So now the U.K has decided to exit, what does this mean for you? Well here’s the thing, right at this moment pretty much everything is speculation. This is all brand new to the world, a ‘leader-state’ has never left the EU before, so calling what will happen either way is extremely tricky. We know some things that need to happen (activating Article 50 of the Lisbon Treaty, which outlines the exit) which will then begin a two-year countdown where all terms of exit need to be negotiated and settled. However we do know this won’t happen before October, after PM David Cameron has officially left office.
As for the everyday, some changes have already become apparent. Here’s a quick rundown of what changes you might start to see in the coming weeks, more specifically the ones that affect you personally.
Will your summer holiday be more expensive?
As expected, the leave vote has caused a sharp collapse of sterling overnight. It was pushed down to a low of €1.20 against the euro, which is 15% less than the rate you could get last year. It’s worse if you look at the dollar which is down by around 6.5%.
When it comes to your holiday spending – where you spent £500 last year, you will need to add another £65 on top this year. Ian Hughes, of financial researcher Consumer Intelligence, said: “We would strongly advise anyone planning to buy foreign currency this weekend to hold off.’ ‘By the middle of next week it should have settled down, although consumers may still lose out on euros.’
What about buying property?
There have been reports this morning of buyers pulling out of house transactions as they fear that the leave result may push house prices down, leaving them stuck in instant negative equity on any purchases they make.
Independent property market expert Henry Pryor has predicted that UK house prices may fall by 15% and transaction volumes down by 20%. If sterling continues on its sharp decline against other currencies, it could present a lucrative opportunity for overseas buyers. We could see a rise in properties being bought by overseas residents as they take advantage of the drop in value of the pound.
Will filling my car be more expensive too?
In a word, yes. Crude oil is priced in dollars, so with the fall in sterling, it cost more to buy, therefore you should expect the prices at the pumps to go up. If you can, you should fill up today as garages are yet to put up their prices.
Keep an eye out for our Part 2 where we will go over some more of the changes coming our way.
Main photo credit: Andrew Gustar