Is now a good time to buy a house?
On March 26, the Government advised home buyers should delay moving while social distancing measures remain in place to fight coronavirus. The Government said that “where the property being moved into is vacant, then you can continue with this transaction although you should follow the guidance on home removals.” However, there are still new properties appearing on the housing market, and although the official advice is that it’s best to avoid moving where possible, it’s not technically against lockdown rules so long as social distancing rules are followed.
The Government said: “Given the situation in the UK with regard to the outbreak of coronavirus (COVID-19), we urge parties involved in home moving to adapt and be flexible to alter their usual processes.
“There is no need to pull out of transactions, but we all need to ensure we are following guidance to stay at home and away from others at all times, including the specific measures for those who are presenting symptoms, self-isolating or shielding.
“Prioritising the health of individuals and the public must be the priority.
“Where the property being moved into is vacant, then you can continue with this transaction although you should follow the guidance in this document on home removals.
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“Where the property is currently occupied, we encourage all parties to do all they can to amicably agree alternative dates to move, for a time when it is likely that stay-at-home measures against coronavirus (COVID-19) will no longer be in place.
“In the new emergency enforcement powers that the police have been given to respond to coronavirus, there is an exemption for critical home moves, in the event that a new date is unable to be agreed.”
On March 26, UK Finance confirmed that “all mortgage lenders are working to find ways to enable customers who have exchanged contracts to extend their mortgage offer for up to three months to enable them to move at a later date”.
This is to support customers who have already exchanged contracts for house purchases and set dates for completion.
If a customer’s circumstances change during this three month period or the terms of the house purchase change significantly and continuing with the mortgage would cause house buyers to face financial hardship, lenders will work with customers to help them manage their finances as a matter of urgency.
Is now a good time to buy a house?
Home buyers and renters should, where possible, delay moving to a new house while measures are in place to fight coronavirus.
Anyone looking to start a house move now will struggle as buyers are not allowed to view homes in person.
Speaking to Express.co.uk Chris Evans, Head of Specialist Mortgages at Pure Commercial Finance said “great opportunities” will emerge for first-time buyers “once the current situation starts to die down”.
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- Will house prices be cheaper for first-time buyers?
Mr Evans said: “A lot of people will be keen to sell assets that they’ve been holding onto for longer than they’d have liked, and again, valuers will be exercising caution with their valuations.
“I also think that there will be some very attractive rates available, especially after the base reduction recently.
“The one major stumble is that many lenders may take more time releasing their 95 percent LTV products, meaning most lenders are only offering products that require larger deposits, which of course will make it more difficult for first time buyers that may not have this.
“If they have the deposit available, then it would be great for first timers to make the most of the improved rates that are likely to become available.
“The upside of seizing these opportunities as quickly as possible for the wider market is that, the more people that buy as soon as possible, the quicker ‘complete normality’ will return to mortgage lending products as the confidence in the market will grow back.”
Since the pandemic started to severely impact people’s lives, the housing market has dwindled.
Between March 8 and April 11, there were 65,531 new listings on Rightmove compared to a total of 112,570 homes added between March 10 and April 6 in 2019.
But sellers do not appear to have withdrawn homes from the market in any great number, with available stock down by just 2.6 percent.
However, many first-time buyers are concerned about buying their first home, especially in the current climate.
Prospective first-time buyer Emma Hull told Express.co.uk: “As a first-time buyer, my hope is that a lot of the property prices will decrease because people will want to sell quicker or they may not be able to afford their mortgage, so will want to sell and downsize as soon as possible.
“What I am a bit worried about though is not being able to buy a property at the price that I’ve previously been looking at, as banks won’t take into account my bonuses in my last few pays.
“When this is over, god knows when that will be, I still want to be able to purchase a property in the range that I’ve previously been looking at, and if the property prices drop, then hopefully this just means that I can get more for my money.
“My deposit is quite good, so I’m not too worried about the banks not lending me money, but after speaking to a few of my friends who are in similar boats, they’re worried that they won’t be able to get a mortgage because their deposits are at the lower end of the scale.”
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