You may not understand how amazing, and yet complicated cryptocurrencies are, but you’ll eventually come to see why they’ve become so popular. Any government does not control cryptocurrencies, so no one can stop you from using them anywhere!
They’re super easy to trade, store, transfer, and use for shopping—all you need is a cryptocurrency wallet. This means you’re safe from hackers since your money is stored digitally on a secure server. You won’t even have to go through the hassle of carrying around cash or debit cards anymore!
Cryptocurrencies and Real Estate in the UK
You may be wondering how cryptocurrency can help you buy a house. The reality is that cryptocurrency prices and markets have started to creep into real estate transactions. It is only a tiny part of the market, but that could change quickly if virtual money becomes more widely accepted. Crypto is being used as a way to structure and facilitate many kinds of real estate deals, as well as to fund them.
Some property experts predict that in the future, real estate agents will be able to use blockchain transaction data to track the history of homes they are selling — back from when they were built or purchased by their current owners.
While cryptocurrencies like Bitcoin and Ethereum have been around for some time now, individuals have only recently begun using them for transactions involving significant assets like houses. We’re still in the early phases of this new technology, so let’s take a closer look at how cryptocurrencies work and what effect they could have on real estate markets in the UK.
How Much Do You Need to Buy a Home?
Looking to buy a home in the UK? The average value of a new home is £234,000. Should you need to get your hands on some cash, you would likely be able to find a cryptocurrency like Bitcoin that could help you out.
In the UK, the typical deposit paid by first-time buyers is around 13% of their property’s value. So if you were looking to buy a house at £234,000, your deposit would be £30,000.
If the prices have risen over time (as they usually do), this figure could also increase. On average, new home buyers will pay over £1,300 more for their deposit than last year—which means those with smaller budgets will struggle to save up enough money for the required down payment on their dream homes.
Is Cryptocurrency a Safe Investment?
The decision to invest in cryptocurrency is personal, but plenty of arguments against it. For starters, cryptocurrency is volatile. Since there’s no underlying cryptocurrency value to back it up, the price can swing wildly depending on demand.
Some cryptocurrency prices have skyrocketed (bitcoin gained over 1000% in 2017) while others have plummeted and become worthless (such as the infamous bitcoin fork from August 1st, 2017), so you need to be prepared for significant fluctuations.
Cryptocurrency offers no guarantees. There’s no regulatory body that protects the interests of investors or provides recourse in case something goes wrong—if you lose your cryptocurrency due to fraud or theft, you won’t be able to get it back.
Cryptocurrency is not regulated and not insured. If your bank or wallet provider goes out of business tomorrow and takes all your money with them, you can do nothing about it.
Cryptocurrency is also prone to fraud and theft thanks to its lack of regulation, so if someone steals yours from an online wallet, it’s gone forever unless you find a way to get it back yourself (which will likely require hiring an expensive lawyer).
Buying a Home in the UK With Cryptocurrency
It may not make getting your hands on freehold property much easier, but it will certainly make the transaction process easier. The first step is to check that your solicitor is familiar with cryptocurrency transactions.
Most reputable firms will now have at least one lawyer who knows about virtual currencies and how the law applies to them. If you can’t find anybody, make sure you explain what you’re doing in detail so they can research it properly – most will be happy to help.
You should also bear in mind that virtual currency transactions are not regulated or protected by the Financial Services Compensation Scheme (FSCS) in the same way as a traditional mortgage.
In terms of what happens when you buy a house with cryptocurrency, not a lot changes from the consumer side – you go through all the steps of standard conveyancing, including searches and mortgage approvals if required, except for one key difference: instead of sending cash through to your solicitor’s account, you send Bitcoin instead (and of course receive it back if things don’t go according to plan).