Housing market experts are in agreement: the coronavirus has caused some short-term disruption, but the market still remains open. As the country slowly returns to normal over the coming weeks and months, we can expect things to start to settle down.
This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
Mortgage repayment holidays
One of the edicts of the government to help mitigate the economic turmoil many have faced as a result of the countrywide lockdown was that all lenders were required to offer mortgage repayment holidays. As many flocked to have their payments temporarily stopped, providers shifted their focus to deal with the increased volume of work from their existing customers.
So, at the height of the pandemic, mortgage lenders’ resources have been focused on existing customers.
Then we had a reduction in the base rate
On top of fielding those enquiries, with the Bank of England base rate hitting 0.1%, many borrowers whose current deals were drawing to a close attempted to take advantage of the low rate by remortgaging, either with their current lender or by securing a new deal.
As the tides change, providers will be shifting focus to new mortgage applications, enquiries, and underwriting, all the while still managing the flow of remortgaging opportunities.
It’s tempting to seek the benefits of a low base rate, but competition is fierce and there are lots of different deals available. Working with a mortgage adviser, whose job it is to keep track of the market, is your best bet to securing the right deal for you.
The effects of coronavirus continue
Before the outbreak, activity levels and price growth in the housing market had been growing steadily thanks to strong labour market conditions, low borrowing costs, and a more stable political climate.
As part of the government’s advice during the pandemic, we were instructed to maintain social distancing and only essential businesses were to remain open.
On top of that, they imposed restrictions and advised against undertaking any new housing transactions during the lockdown.
Estate agents, like many other non-essential workers, have been operating remotely, doing their part to stop the spread of the virus. Surveyors, too, have had to cease valuations due to social distancing.
This has had a huge impact on the home buying and selling process.
So, what’s next?
The housing market, as usual, is highly dependent on the wider economy, so it’s currently hard to predict how long it will take to get back on track. As the country recovers, the hope is that the economy and mortgage market will quickly follow suit.
In an effort to support economic recovery, the government has instituted policies meant to protect businesses and jobs in order to safeguard the public’s incomes and to keep borrowing costs down. The aim of these measures is to lessen the economic effects with the expectation that recovery will be swift.
Here to help
If you haven’t already discussed a mortgage repayment holiday with your financial adviser, now’s the time. Or if you’re thinking about remortgaging or securing a new mortgage deal, get in touch with us today. We’ll conduct a mortgage review to help you decide the best course of action.
Don’t hesitate to get in touch with us to schedule a meeting during a time that works for you.
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Dental & Medical Financial Services have been helping doctors and dentists with finding low-cost mortgages for your home and investment properties for over 25 years. Call Chris to discuss your options.
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