Has the unpredictable nature of the current situation made you uncertain about moving house? Our experts talk about what the future may hold for the property market.
The nation is slowly but surely easing its way out of lockdown and the property market is able to move forward again. House viewings have resumed in England and lenders are reinstating higher loan to value deals. And of course, interest rates remain extremely low, which means now is a good time to borrow.
This is all encouraging news, and many consumers have resumed their moving arrangements, with 60 per cent of UK buyers continuing with their plans to move, according to a survey of 2000 people by property website Zoopla. However, some consumers are uncertain about whether to proceed with their plans and it’s understandable that some of us may feel a little shaken up by the unpredictable and unexpected situation we’ve all encountered.
There have been rumours of house prices falling, with Lloyds Bank predicting a price drop of between five to ten per cent in the next year. The market is expected to bounce back fairly rapidly if prices drop, but you may still be wondering, is now the right time to move?
‘I’d be wary of anyone predicting big falls in house prices,’ says Phil Leivesley, MBA’s Senior Mortgage and Protection Adviser. ‘Usually those with vested interests will talk the market down, and they’re only doing so for their own gain.’
Getting back to work
Phil admits it’s hard to predict the future but with lockdown easing, he says it’s a chance for employers to get their staff back to work, which should help the market. ‘The crucial period, which will determine the fate of the market over the next 12 months, will be when the furlough scheme changes and employers are required to contribute partially to employees’ wages,’ he says. ‘If we see a large rise in redundancies, this will almost certainly have an impact on the housing market. However, if we’re being optimistic – and I am – we can point to the planned phasing out of the lockdown over the coming weeks and months, which should hopefully help employers to retain their staff.
‘So long as those who were planning to be active in the market come out of lockdown financially unscathed, then we may not see any reduction in house prices at all,’ adds Phil.
MBA has seen a healthy number of mortgage enquiries in the last two weeks. ‘I’ve received more enquiries from people looking to buy than I did in any two-week period in January and February when the market was booming,’ adds Phil. ‘This suggests there is sufficient demand in the market for us to be confident that house prices may not adjust much, if at all.’
‘Estate agents are still valuing properties at the same level as before,’ says MBA’s Managing Director Monica Bradley. ‘We won’t know for sure what the future holds until the furlough scheme ends and employees know if they are going to still have regular income; but if people are feeling reassured and confident about their future incomes then this will be good news for the property market.’
‘Anyone who tells you with certainty that they know what is going to happen is probably lying,’ adds Phil. ‘There are many variables out of our control, however, lenders are lending, and it remains cheap to borrow, and this will continue to be the case for a while yet.’
If you plan to buy an interim or first property that you may only want to live in for a few years before upgrading, you may be particularly concerned about whether now is the right time to buy. ‘Once you own a property then what happens to pricing is, to an extent, all relative,’ says Phil. ‘If property prices were to go down and you’re looking to upsize in the future, then the price of the property you would be looking to buy would also be reduced. Only those looking to downsize or sell without buying onwards should be wary of pricing.’
Phil adds: ‘The best piece of advice I’ve heard is that there is never a good or bad time to buy a home. If you need somewhere to live, you need somewhere to live!’