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My son and daughter in law currently live in rented accommodation with their 4 year old boy. Renting has suited their needs to date but with their son about to start school they are looking to purchase their own place. They have seen a suitable property they like locally, which is similar to the one they currently rent and is up for sale.
They have asked me for my views on buying in the present climate. Whilst I am flattered and touched by their seeming belief that I can offer sage counsel, I really haven't a clue what to say.
I would be interested in hearing, and grateful for, any advice or comments from those on here who are more knowledgeable and experienced in these matters than I am.
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house sales are currently on hold due to lockdown, however, have they applied for a mortgage or have a mortgage promise in place? with the current situation I don't think many banks will be processing new mortgage applications.
If they are cash buyers I think they are in a fantastic position.
Just my tuppence worth
A few things come to mind that would make me think twice at the moment...
The practical challenges of viewing, getting surveys done when there is a hold on non-essential travel. Plus I think there was a government request to avoid completions at the moment.
Secondly, I wouldn't be surprised if prices settle back somewhat as the economy struggles - though no crystal ball....
ATB
Jon
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I am in the same position at the moment, but waiting for the Covid fallout. I cannot see at all how prices will not go down by at least ten or maybe 20% and that’s in the South. Up North, they may drop 30%, so I would wait, sit on the cash and buy when the time is right. I could be wrong, but I really don’t think I will be.
This is what the government advise for the housing market at the moment-
https://www.gov.uk/guidance/governme...id-19-outbreak
Not strictly answering your question- but I had a house sale go through the week lockdown started, we exchanged and completed on the same day and the buyer was moving into my empty property so went though ok, made for an anxious time though
Dan
Last edited by DANH; 23rd April 2020 at 11:44.
I really can't imagine this and hope it doesn't happen, maybe because I'm somewhere between the economic bounce back camp and a slower recovery.Originally Posted by langdalematt
I was chatting with an estate agent pal yesterday and when we start to return to normal my property will be going the market at the same price as when it was last valued months ago. Supply was and will be low and demand will return.
But OP no they can't buy it at the moment :)
Just my 2-penneth
Ian
Ian,
Sorry to say I just don’t see it. Things won’t return to normal for a long time and many of those furloughed staff will end up being laid off. This really is very bad and as much as the government want to spin it, the fact is massive damage has already been done and a recession was overdue anyway prior to Covid. Maybe being over dramatic, but I really don’t think so, the rich will get richer and the poor a lot poorer.
I’m heavily involved in property personally and mortgages (employ half a dozen mortgage advisers ), so am seeing this change and unfold on a daily basis. My first point would be that no one knows right now, how much damage this virus will end up doing to all aspects of the economy - house prices, jobs, stock market, watches, holidays, businesses etc etc. It’s all guess work for now.
Valuers have stopped doing physical valuations so that’s made it harder to guess. A lot of lenders have pulled rates on higher loan to value products (above 75%) so they are being cautious. Automated valuations are being done - we’ve seen some unaffected and some coming back ridiculously low (650k val on a property in London 5 years ago coming in at 480k last week. The underwriter actually called the adviser as they were embarrassed but said they don’t want to take risks at the moment). Until this week none of the lenders have really said much in writing, but we’ve now had correspondence to confirm that they foresee a drop in prices. Lenders are changing their rules almost as we speak - for example one lender has announced that they will want to see 3 months Current business bank statements from any self employed person going forward. Normally they want the net profit and personal bank statements. Now they want to see proof that the self employed person is still got regular income coming in. That could have a severe impact on the market.
My ‘best’ guess is that when lockdown is lifted, there will be a flurry of people desperate to view houses and maybe even make offers. Lots of offers possibly. Activity will be intense. All may seem okay for a while.
Valuers however may be ultra cautious which could automatically reduce house prices down. People earning less money will reduce house prices as income multiples will mean they can borrow less and unemployment rising will have a huge knock on effect. A 1o% drop in prices would seem a good deal right now as I’d guess it could be far greater than that in time. I’ve seen 10% drops predicted as a minimum and 50% as a maximum, with most ‘guesstimates’ around 15% to 20%. But like I said, were all just guessing right now.
Personally I’d sit and wait myself if that’s possible as what we see initially after lockdown won’t be a true reflection. A couple or few months after could be a truer picture. All that said I’m sure we’ll bounce back and in 12 months or 2 years things will start recovering again.
@ Devonian
I have recently inherited a house which I want to sell.
I am currently renting and will look to buy as a cash buyer but am not in any hurry to do so.
Would you advise selling as soon as possible after the lockdown ends, (hopefully the fact that there is no forward chain might help) and biding my time to buy?
I really don't know what to do at the moment.
Kevin it’s a difficult one as no one knows what’s going to happen tomorrow let alone in a month or 3 months. If you do intend to sell regardless then I’d probably look to get it on the market as soon as possible - 1. The sooner you’ve sold the sooner you’ll have the cash to buy and 2. Houses are more likely to go down than up going forward.
That said if you get less for your house in the future than you would have for a month ago, in theory what you buy will be cheaper. So swings and roundabouts. You’ll probably be able to gage where the market is going based on the interest yours receives so that might help you decide on whether to buy.
Thank you.
Ah well I have to get through probate and stuff first, so who knows where will be at that time.
Although I think a good location will always be a good location, much depends on people's ability to obtain mortgages.
I don't think this will be the case either. Not sure what you mean by 'north' but eg Scotland historically rarely sees the same increase & decrease in prices as the 'south' and I do not believe house prices will drop by 30% or anything even remotely close to that.
https://www.bbc.co.uk/news/business-...Q-y3K0nh0Bf0uI
Maybe I’m living in denial, but I just can’t see 20-30% drops, unless you have thousands of people all in an area or areas trying to sell at once.
It's just a matter of time...
Say Crawley where you have high skilled specialist people who work in one specific industry that ends up on its arse?
Then you will have areas where more houses are for sale than needed.
Not all of the country is affected in the same way though.
People need somewhere to live. So unless they no longer need, can, or want to live in that area then there will always be a ready market - are already have huge disparity of house prices throughout the country for similar sizes of housing.
It's just a matter of time...
I can't see a 20-30% decline but I think everyone knows a decline is happening. Lenders will want buyers to have a higher deposit taking out some of the would be buyers and surely won't be letting people fully max out.
If you've got the higher deposit levels being insisted on and max borrowing being trimmed it's clear prices will go down and that's before you factor in down valuations and God knows how much probate.
We sold our house in Oct and are living with family currently. The plan was to buy a house in the Easter or summer holiday which is now obv out the window. Our current AIP is for about 5.5x our joint basic income and when we renew it I'm not expecting that to be offered again. While it would benefit me for prices to tank I don't see 30% however prices in London could drop 15% overnight and still be too expensive.
Maybe we will see more of what has happened - that place is their car.
Unless they can’t afford PCP payments.
Well in the US people have rationalized they need the car to be mobile and so picked that over somewhere to live.
I think that a lot of potential purchasers have already been sitting on their hands due to Brexit unknowns. I suspect the current crisis, reduced incomes and whatnot, will induce a sharp fall in prices that won't recover until we know what kind of deal we're getting, but then things will recover. Just my very uninformed finger-in-the-air 2p worth.
Don't just do something, sit there. - TNH
Prices will fall, it is just a matter of by how much and will be far from linear in approach. Low interest rates will help soften the blow but un-employment will rise, job security will fall, people will be more cautious over personal finances and stretching themselves, etc. As others have said, lenders will be a lot more cautious too.
It speaks volumes that valuers are once again adopting an uncertainty clause approved by the RICS, which basically says that whilst they have valued the asset at X there is insufficient evidence in the market to determine where true pricing sits at this specific point in time.
Well, I’m still buying and nothing I’ve seen has put me off completing and moving in. It’s the right house for me though, and I would have happily paid more for it, if I could have afforded to.
It's just a matter of time...
And i am selling...everything was ready to go before lockdown and the estate agent has even suggested to put in on the market for 10k more as there was limited supply before due to Brexit and even more so now.
It is a Bungalow in the best part of town and people looking to buy are usually downsizing and don't need a mortgage.
So house prices to fall...car prices to fall and expensive watches to fall...i will let you now when my house sells.
The big unknown is how many people on furlough ever go back to work - the furlough for a lot of companies provides a "wait and see" and if the economy does not snap back...
I’m currently trying to sell 2 houses. I wish I was a buyer ...
I work for a specialist mortgage lender and this is pretty much spot on
British Airways has set out plans to make as many as 12,000 of its staff redundant due to the global collapse in air travel caused by the coronavirus pandemic.
The airline’s chief executive, Alex Cruz, told BA’s 42,000 staff on Tuesday night that the company “must act decisively now to ensure that British Airways has a strong future” and that more than one in four jobs must be cut.
Cruz said BA, which has placed 22,600 people on the UK government’s furlough scheme, “cannot expect the taxpayer to offset salaries indefinitely”.
https://www.theguardian.com/business...taff-redundant
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