The coronavirus outbreak has shaken the property market – but has it also given you an opportunity?
What has happened to the housing market?
The housing market has not been immune from the effects of the coronavirus. The first symptom was of course an abrupt halt to new sales. With lockdown in force, viewings were impossible, and many estate agents furloughed their staff and closed down for the duration.
It was not just new sales put on hold. Many purchases that had been agreed could not be progressed. Securing a mortgage requires a surveyor to carry out a physical inspection of the property, which was stopped during lockdown. The sale of homes on new developments was feasible with just a ‘drive-by’ valuation, which may be conducted from a desk. But many surveyors simply joined estate agents on furlough.
Mortgage lenders facing an uncertain future withdrew products and even offers.
Now, there are two pieces of good news. The first is that the market appears to be coming back to life, and the second is that you may be able to save on your mortgage without moving home.
The estate agents are back
Housing secretary Robert Jenrick surprised the industry by announcing that viewings could resume, estate agents and show homes could open their doors, and conveyancers and even removal firms could return to work.
Agents are calling buyers and sellers to resume deals that were already close to being agreed. They have also been getting ready for pent up demand, but many believe business may be slow at first. Some suggest sales activity to take around nine months to recover and prices a year to return to pre-crisis levels.
If you can act now, you could secure a sale to a motivated buyer – or buy at a good price. Remember, before the crisis, house prices were heading up in many parts of the UK.
You could save money without moving
A move might not be necessary to save in the current market. A remortgage could replace an existing home loan with a better deal and save you money in two ways.
First, it lets you benefit from the increased value of your home. Since you took out your existing mortgage, the value of your property has probably increased. The rate charged for a mortgage varies according to the ratio of the loan to the value of the property. The lower this ratio, known as loan to value, or ‘LTV’ the lower the rate charged, and the smaller your monthly outgoings.
Second, it lets you take advantage of lower rates when the cost of borrowing falls. With the Bank of England Base rate at the lowest ever, the stage is set for some dramatic savings.
How much could you save?
The financial reaction to the Covid19 crisis has been a drop in the Bank of England Base Rate. Lenders have not passed on all the savings from the money markets, but there are still some very attractive deals to be had, as they compete for borrowers to help them meet their lending targets.
If you had taken out a tracker a couple of months ago your rate might effectively have halved in the current market. However, if you were among the vast majority of homeowners who believed interest rates could get no lower and opted for a fixed rate deal, you will not be enjoying any savings whatsoever.
Remortgaging could bring you the savings you deserve.
Finding the mortgage and remortgage deals you want now
Lenders need to lend to make money, and both mortgage and remortgage deals may be available – although you may need an expert to help you through a market that is more confused than usual.
At Continuum, our experts can help you find the mortgage deal you need, searching the entire market, and taking advantage of deals that are not generally advertised.
We all need to make the most of our money at the moment and cutting the cost of buying your home could be key to making your cash go further.
Call us now for the help you need.
The information contained in this article is based on the opinion of Continuum and does not constitute financial advice or a recommendation to suitable investment strategy or Mortgage product, you should seek independent financial advice before embarking on any course of action.
Your home may be repossessed if you do not keep up repayments on your mortgage.
You may have to pay an early repayment charge to your existing lender if you re-mortgage.
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