‘Second Steppers’ to Benefit most from Post-Lockdown Property Market
How are you feeling about selling or buying right now? Is it a case of nervously dipping your toe in, or going gung-ho and finishing what you set off to do before the pandemic hit?
You could be forgiven for adopting either option. It has to be said though, this is certainly not the same property market it was back in early March.
Sure, the apartments and houses are still there intact – and probably in a better state than before thanks all that lockdown DIY activity. But, prices will have changed. And so will buyers’ ability to do just that – buy. The uncertainty over jobs will obviously have had an influence on mortgage affordability. Then there are the sellers who are also worried about redundancy and becoming increasingly desperate to sell in order to downsize.
Lockdown set to benefit house buyers
Around 450,000 house deals have been ‘frozen’ or fallen through since lockdown officially began on the last week of March.
The Bank of England predicts house prices may drop by as much as 16 per cent over the next 12 months. Lloyds are being more optimistic, touting a five per cent price fall by the end of this year.
Regardless, of the discrepancy in figures, the market appears to be heading in the direction of favouring the buyer. It has already prompted many to ask for price cuts – of up to 20 per cent in some cases.
Second-steppers may also reap rewards
Those looking to ‘move up’ to a bigger home may be better off financially if they can secure a discount on it. That’s because, if even if their own home has dropped in value, it won’t be by as big as the house they intend to move to. That’s especially the case if they bought their first house more than five years ago when the property market was in a much more stable position. And anyway, there hasn’t been that much of a drop in the cost of first-time buyer properties, according to the Rightmove portal.
Buyers priorities have changed
Just as we predicted in our last blog, buyers’ preferences have indeed changed as a result of lockdown. Rural areas are experiencing more buyer interest than ever before, say Rightmove. So too are homes with big gardens. Analysts are also predicting falls in prices for houses and apartments which had benefited from their close proximity to rail links.
Mortgage applications to be renegotiated
Most banks and building societies are happy to except furloughed workers incomes as counting towards their mortgage - all except Virgin Money, that is. But it could mean taking a longer-term mortgage or even having to find more deposit.
In fact, first time buyers will find it more difficult than ever to raise a deposit, with many lenders increasing their requirement from 10 to 15 per cent.
Meanwhile, self-employed mortgage applicants can expect to have even more of a grilling post-lockdown.
Get in touch!
Wondering how the current property market suits your particular situation? Then do get in touch with the team here at Griffin Residential. We are happy to advise – whether buying or selling. Call us on 0345 561 0050 or email us via the Contact Us page on our website www.griffin-residential.co.uk