Is the property market going to start moving again? And what will happen to house prices?
The government recently sharing a timeline for the gradual easing of restrictions offers some hope for the property market. The National Association of Estate Agents has predicted that the housing market will re-open for business in around three weeks, which ties in with the government’s timeline.
There has already been some activity during lockdown. Here at MBA, we’ve been able to complete some remortgages and some house surveys have been carried out with surveyors using PPE equipment. Some house purchases have even achieved completion.
However, for the many buyers and sellers who found transactions halted, it will be a relief to get things moving again. According to the property website Zoopla, there are around 373,000 transactions are currently on hold in the UK. Estate agents have been dealing with customers to answer queries and help them find properties during lockdown. Many are hoping to re-open their doors to customers in phase two of the easing of the restrictions in early June. This can only be a good thing for the property market.
If you have been thinking of buying a property, you may be wondering what the lockdown has done to house prices. Prices increased slightly in April despite the lockdown, according to figures from Nationwide. The average cost of a home rose by 0.7 per cent. However, Estate agent Savills has predicted that house prices could fall between five and ten per cent. Lloyds Bank has predicted a five per cent decrease or a worst-case scenario of 10 per cent. However, recovery is not expected to take too long – prices should recover slightly in 2021 and there may be a price surge in 2022. It’s important to be aware that the current situation is very different to the house price crash of 2008. Borrowing was difficult back then, with buyers needing a 40 to 50 per cent deposit to get approved for a mortgage. Interest rates were also higher.
Find a bargain
First time buyers may be able to secure a bargain. If you are a first-time buyer with your heart set on a new build property, which of course comes with a ten-year New Homes Warranty, you may be able to make the most of the current situation. Without a property to sell and no chain, you could proceed with the purchase of a new build home at a lower price than previously anticipated if you are willing to view and buy it on the basis of a virtual viewing.
Not surprisingly, there is expected to be a rise in virtual viewings, which were talked about before lockdown but never previously took off. Now that the situation has changed and social distancing needs to remain in place for the foreseeable future, virtual viewings could be viable way to view and perhaps even purchase a property. Some estate agents believe that virtual viewings could become normal in future and some report that they have had success with them.
Start getting your paperwork ready
If you have been thinking about buying your first property or contemplating moving house, it could take you two to three months to find your dream home. This means now is a good time to start looking and see what prices are like in your desired area. It’s also a good time to do your research on the area itself to check that it suits your requirements. Start the search online and see how prices compare. You can also get your paperwork in order (bank statements and salary slips) and talk to a mortgage broker about what you can afford to spend. This all takes time, so the sooner you start the better.