The ongoing COVID-19 crisis is profoundly affecting every aspect of our everyday lives, so it follows that it’s also having a huge impact on the economy, and the property market with it.
Our expert advisors at Savills and the Mortgage Advice Bureau have been monitoring the market closely and keeping us informed, so we thought we’d share some of their insights and predictions for the future with you.
Property sales have declined significantly whilst the government’s advice to hold off on moving house for the time being is adhered to. However, if you have already committed to buy a property the advice is to sit tight as transactions should be able to proceed as normal once it’s safe to relax the COVID-19 restrictions. Depending on your solicitors, certain parts of the sale process can still be carried out in the background too. It’s worth noting that buying a brand new, vacant home presents less risk in terms of potential contamination than moving into a home that’s been previously occupied, and that, once the restrictions have been lifted, the supply of new homes like ours is likely to be reduced, as many housebuilders have temporarily halted construction.
In terms of mortgages, many lenders have recently applied restrictions to their mortgage offerings and increased their LTV (loan to value) rates. However the expectation is that this is likely to be a temporary measure whilst lenders adjust to the uncertain market and deal with demand from existing customers, some of whom will be applying for mortgage payment holidays. In fact, if you’ve already received a mortgage offer, your lender is likely to have extended this for an additional three months, giving you extra time to complete your home purchase and saving you from having to apply again.
Knight Frank predicts that any minor drop in house prices this year is likely to be corrected in 2021, when they predict a 5% rebound. The housing market was in a stronger position at the start of 2020 than it had been in some time, which is reflected in the uptick in property sales and growth in prices that we saw pre-pandemic. The demand for homes is still there, and Savills predicts it will only build up whilst transactions are on hold.
The hope is that the disruption we’re currently experiencing will be relatively short-lived, so if you are considering making a move, it might be a good idea to explore your options so that you’re in a good position once the housing market reopens. We’re on hand via phone and email to talk through any questions you may have – you can reach us on 01535 288009 and [email protected] and view our available homes here. In the meantime, let’s all stay safe in our existing homes to protect our families, our communities and our NHS.