As we start to accept the most annoying of phrases ‘the new normal’, we felt it was an excellent time to take a look at the impact Coronavirus has had on the housing market.
Early reports warned of a crash in house prices as uncertainty around individuals financial situations continued.
In contrast, many families have spent months stuck in their houses, unable to see people who don’t live locally and experiencing a long-term change in working habits. As a result of these emotional experiences, it looks like there may well be a lot to look forward to if you are planning to buy or sell your home.
Reduction in Stamp Duty
No doubt the government’s decision to suspend Stamp Duty on all properties under £500K until March 31st 2021 is another huge incentive, saving as much as £15K on the transaction costs of a new home.
It will be welcoming news to the majority who were choosing to proceed with their home purchase regardless of the current economic climate, and so the Chancellor’s announcement is nothing but a house-warming gift.
As with all temporary suspensions there will be those that just missed out on either side of the date bracket – for example if you unfortunately have just completed your purchase and have already parted with your stamp duty cash.
The bigger question however is how the Government will reintroduce stamp duty after March 2021. We predict there will be a race to buy as the deadline approaches, with numbers dropping off as people look to buy before the levy is reintroduced.
Although the freeze may not make those of not considering to move home to do so, but for those that are already considering it will be considered as a nice house warming gift, and a step in the right direction nonetheless.
Visits to Rightmove hit 8.5million
The impact of the stamp duty change had a direct impact on visits to leading property website Rightmove, which saw a record number of visitors following the announcement.
Having reached a visitor record of 7.7million the day before the suspension of stamp duty, Rightmove experienced a surge in daily visitors up to 8.5million.
This is against a backdrop of record demand from buyers over recent weeks with enquiries increasing to 93% on the 11th of June compared to same day in 2019.
House Prices & Recession
The predicted financial woes of the world economy are still looming with the Bank of England, predicting the sharpest recession in 200 years in 2020.
Halifax have also reported the fourth consecutive monthly fall in house prices of 0.1% in June.
Mixed with the withdrawal of many low deposit mortgages, there are also particular challenges for first-time buyers.
When Should I Buy a House?
With all these things to consider and the continued rise in the cost of renting, many individuals may feel that the savings offered by the Stamp Duty changes will outweigh any house price reductions or the chance to live in their ‘forever home’.
Requests from potential sellers to have their home valued have also hit a record high, so the signs of a healthy property market with plenty of choices, seem encouraging.
First Time Buyers
Finally, the Government needs to put much more pressure onto banks and lenders to offer mortgages. During the Pandemic, Banks have reduced their offerings to favour those with larger deposits. It is now getting increasingly difficult to secure a mortgage with a 5% deposit – which in turn hurts first time buyers the most.
What is increasingly being found is that the lenders are returning with mortgage products for clients with a 10% deposit on a temporary basis, or only offering a limited number of applications to be accepted per day, whilst they look to ensure they do not take on too many applications to impact service levels. A mortgage broker can ensure you are kept updated on the options available at any specific date.
Lower Interest Rates
Back in May, the Bank of England announced the lowest level of interest rates in history, at 0.1%. Those with tracker mortgages and variable rate mortgages have seen their monthly repayments drop as their mortgages follow the Bank of England base rate.
For those looking to take out a mortgage, you can seek to take advantage of a fixed rate mortgage, to ‘lock in’ the low interest rates for the coming years.
Free Mortgage Advice
As the mortgage market reacts and adapts to the current situation, it is more important than ever to thoroughly challenge the market when searching for a mortgage.
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Discover how our expert team can help you save money, sourcing the right products for your circumstances from our extensive database of leading providers.
A mortgage advisor will help establish your affordability, the insurance you can take out to protect your investment and family whilst also completing a whole of market review to find the most suitable mortgage for your situation. The mortgage service at trufe is end to end, meaning we are there throughout the full process helping you to navigate every step to success, and are more likely to get the support you need than you would from a High Street Lender.
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So contact trufe. today on 0113 2433144 and let us take the legwork out of your search.