April Market Update
What a difference a month can make! Our March Market Comment was very positive and full of the joys of spring. Indeed, the Halifax subsequently reported that house prices were 2.1% higher at the end of March than they had been at the end of December 2019. The “Boris Bounce” was very much in evidence, but who’d have thought that Boris would now be fighting for his life in intensive care, along with thousands of others, due to the pandemic.
As for the property market, this has, for the time being, been put on hold. The government has strongly discouraged moving and mortgage lenders are tightening their belts too, with a deposit requirement of over 40% becoming widespread. According to Zoopla, in the next three months, we can expect a fall of at least 60% in the number of housing transactions.
The moving-related knock-on effects of the lockdown are widespread: estate agents can’t appraise, Domestic Energy Inspectors can’t inspect, valuers can’t value, surveyors can’t survey, so most buyers can’t buy. Even if they could, banks’ ability to process mortgage applications with reduced staffing levels is significantly reduced and underwriters’ attitude to risk is becoming more cautious daily.
As soon as we are back to some semblance of normality, subject to any damage done to the economy at large, the indications are that it will be “business as usual”. Interest rates are likely to remain extremely low and any inflationary pressures caused by massive government borrowing could even be good for the property market as investors flock to bricks and mortar.
During this time we are very much open for business – if only for an advisory chat on the phone. Please feel free to call us on 020 3633 7866 and we’d be happy to share the local market update with you.