Originally Posted by
Devonian
Having been involved in buy to let’s for over 25 years both personally and professionally, I’ll echo the sentiment that no one knows. They can’t know as what’s happened in the last two months is unprecedented in our lifetime. So we can only go on what we know and what we think . . . .
We know that property enquiries are going to be busy, starting now and especially out of lockdown. Why? Various reasons including the time of year, people having to move and also a lot of the people who would have viewed property in March, April and now May backing up. So short term demand could show a strong market which might be misleading.
We also know that Surveyors and lenders will be cautious (they’ve said as much) as they won’t know how this is going to play out. Lenders have been restricting LTV’s and some are restricting borrowing for furloughed staff and want to have proof that self employed people are still earning.
We also know that demand will be strong as there also seems to be a shortage of property, hence why so much building is going on.
What we don’t know is the true cost of this virus to employment, incomes and the economy as a whole. Whilst the furlough scheme is in place until October things are going to be unreflective of reality, as it’s a bit false.
We also don’t know whether property prices can hold up based on ‘borrowing affordability’. If people are going to earn less going forward (less commission, bonuses, overtime, pay rises, net profits, work etc) 4.5 times £30,000 income is a lot less than if it was £40,000. That market will automatically reduce if that happens. So whilst demand could remain strong, if it’s not affordable in the first place, demand is less relevant. Supply would have to become cheaper.
Personally If I needed to buy/move I’d just get on with it. If I didn’t and was uncertain I’d wait and see how it goes in the next couple of months.
The main positive is we will come back from this, that I’m sure of. It might be a hard time for a while but we’ll get there.