The Coronavirus crisis has affected every aspect of life, including the housing market. The question is, how dramatic will the effects be?
It is hard to answer. The 3-month shutdown we are emerging from is unprecedented, the precise economic effects are impossible to predict and even the Chancellor of the Exchequer and the Governor of the Bank of England seem to have radically different views. But although they disagree on the length and the depth both agree that there may be a downturn.
In downturns, money is in short supply, people are reluctant to commit themselves to a bigger mortgage, and with fewer potential buyers, house prices fall. But does the possibility of a downturn now mean that you should pull the plug on any property deal you are contemplating?
The position is complicated. Despite the doom and gloom from the Chancellor and the Bank of England, the mood on the streets (as they start to fill again) is very different.
Far from being dead in the water, the property market may be coming back to life more rapidly than predicted. Property portal Rightmove has enjoyed over six million visits to its site in one day, for the first time ever.
Of course, this does not represent six million potential sales. The site seems to be looking at each click on a property as a unique visit, and most visitors will look at several when they go onto the site. But even if people are just browsing, it is a measure of the level of interest among potential movers.
The site says visitor numbers have been building steadily over the weeks since the housing market reopened in England. It claims to have found a new wave of buyers now entering the market since the lockdown eased.
What does this mean for prices?
More potential buyers should mean more sales, keeping prices buoyant, and pushing back fears about negative equity. Negative equity occurs when house prices fall and means that property is worth less than what you borrowed to pay for it.
With plenty of interest in the market already and low mortgage rates ensuring that property is more affordable than ever before, there seems little reason to fear a collapse in the market.
So, should you buy now?
It is possible to buy and sell homes again, and interest is obviously growing, although it may not yet have translated into actual sales in any great numbers.
The Government’s measures to protect earnings during the crisis and mortgage holidays from lenders should mean that few sellers will be forced to take big price cuts. There may not be big falls and bargains to be snapped up – but you could still possibly take advantage of low interest rates to secure a bargain on your mortgage.
If you believe you have found a property you want for a good price, there could be every reason to buy it.
The one thing to be certain of is that you get the most suitable mortgage for your needs. At Continuum, our experts can search the entire market, and take advantage of deals that are not generally advertised. It means paying less for your home.
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 a suitable Mortgage product or investment strategy, 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.
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