Property Market Close to Normality

We are 2 months into the Coronavirus lockdown and after an initial period of uncertainty and flip-flopping by Banks & other mortgage providers, some stability has come to the market with certain banks, that initially reneged on providing mortgages now offering them again, albeit with either stricter lending criteria or higher deposits required. 

Back to “Normal?” Nearly there
The government confirmed in an announcement on the 13th of May that estate agents could return to work. In his speech, the housing and communities secretary, Robert Jenrick, said: “I do know that in every economic recovery in modern British history, the housing market has been key.”

Some Mortgage Rates Continue to Fall Whilst Other Rise
With the Bank of England base rate of interest now just 0.1% the lowest in its history, we have seen reductions in interest rates across some products. Overall the average two-year residential fixed rate now sits at just 2.09% a fall of 0.34% between March and May. These rates are proving to be attractive to first-time purchasers who are also taking advantage of the likely dip in property prices. It must be noted that those who have a 10% deposit or equity will be pleased to see that average rates for two and five-year fixed deals have reduced by a notable 0.17% and 0.26% respectively. However, for those looking for a 95% LTV product, average rates bucked the trend and have in fact increased by 0.10% for two-year fixed rates and 0.04% for five-year deals.

What About the Wider Buy to Let Market?
Although many lenders are now returning to the market, we are seeing some cap the amount they will lend or are ruling out various sectors such as HMOs, multi-unit blocks and holiday lets.

Early into the COVID-19 crisis, catastrophic reports suggested that landlords would struggle with tenants who were unlikely to pay rent. However, in a report published by The National Landlord Association (NLA), just 2% of tenants have missed a rent payment since lockdown. With systems in place, such as Mortgage Payment Holidays, we’re not expecting there to be such a catastrophic knock-on effect for landlords as some might once have expected.

Furthermore, while Zoopla reported a 57% decrease in demand for rented accommodation in the last two weeks of March, they have seen that bounce back by 30% in the first two weeks of April alone. Alongside this drop in choice, average rates have fallen to new record lows since Moneyfacts began recording the data in June 2007.

With the property sector now back up and running, and with some mortgage rates falling to lows not seen since 2007, this is the perfect time to arrange a call with our experienced mortgage brokers who can advise you on a number of matters; from releasing equity to help with a new purchase to supporting first-time buyers with Help to Buy and Right to Buy applications and much more.

If you have any questions or would like to discuss options available to you, please contact our award-winning team who are still accessible either by telephone or live webchat.

Tel: 0208 364 3444

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