The Coronavirus pandemic is having a significant impact on world economies, which will no doubt be causing some concern to UK home buyers.
Our panel experts at SRC Mortgages share some advice on the potential impact this pandemic could have on people looking to buy a home.
The effects of the recent pandemic have left us in very uncertain times, with the housing market changing almost daily. This crisis is set to have a short and long term effect on the market and it is essential that you seek professional advice in relation to your own situation.
In its first response Bank of England took the unprecedented step to shore up the UK’s financial system by cutting the base rate a record low of 0.1%.
Borrowers with variable rate mortgages would have seen their mortgage payments reduce but for those with fixed rates, which is probably most borrowers, the rate reduction has had no impact on their monthly repayments.
Surprisingly, we have seen little change in the fixed rate products available to new borrowers, in fact, some lenders have increased rates.
Simon at SRC says:
"As we look forward to the lock down being gradually lifted and life returning to normal, we are hopeful that the housing market will once again start to pick-up. Some of the national developers have already reopened their sites, which is a good sign."
SRC Mortgages answer some of the most commonly asked questions buyers are enquiring about during this time:
1. Are lenders still lending?
Yes. It is true that some lenders suspended lending at the beginning of the lock down, however for many, this was because of logistical problems as opposed to lack of funds. With offices forced to close, it was simply not possible for them to process new applications. As lenders have adapted to new working practices, we have seen more and more return to the market.
2. What about ‘shared ownership’ mortgages?
Shared ownership mortgages are still available. Some lenders have temporarily withdrawn from the market, but there is still plenty of choice with some big high street brands still supporting the sector. We expect these numbers to increase as the economy gradually starts to recover.
3. I’m furloughed – can I still get a mortgage?
The short answer to this question is yes, but restrictions do apply. For more information for each individual case, we would recommend you speak to a financial adviser.
4. Will property prices fall?
The demand for property still exceeds supply and this is especially true in London and the south east. We are still receiving many enquiries from interested buyers so in the short-term we see no evidence to suggest that property prices will fall. That said, the medium to long-term impact on the economy from the virus is still unknown. In our opinion a home should be seen as a long-term investment, in many cases it will still be cheaper to buy than to rent.
5. Where should I go for help?
Buying a home is a big financial decision and we believe it is essential that people take professional advice. We recommend that buyers speak to an independent financial adviser before starting out on the journey to becoming a homeowner.
If you require further information about buying or selling your home in the current environment, Peabody is on hand to help. We have a trusted and knowledgeable panel of Solicitors and Mortgage Advisers who will be happy to supply you with any guidance or advice regarding your individual circumstance.
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