The mortgage market has experienced some ups and downs over the last few years, but it has undoubtedly been significantly impacted this year due to the coronavirus pandemic. For one, social distancing presented issues for how businesses normally work which resulted in a dip in the market that some fear may take a while to recover. What could be the short and long-term impact on mortgages?
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.
In the short term
At the start of the pandemic, many lenders reduced their product offerings, including high loan to value (LTV) mortgages, which made it difficult (but not impossible) for first-time buyers to get onto the property market.
Additionally, mortgage holidays created an influx of demand so many providers had to limit new enquiries and focus on servicing current customers. Lower rates also pushed many to remortgage also inundating lenders with requests.
In a positive move for home buyers, lenders are also temporarily adjusting their affordability assessments to accommodate the scores of people that have had their incomes reduced this year.
The longer term impact
While most activity all but stopped at the height of the lockdown restrictions, brokers had to find a way to adapt and still get business done.
In every field, people learned to work virtually through video or audio calls as opposed to face to face, and the property market — while presented with unique challenges — was no exception. Showings, meetings and valuations were often held virtually. Whether these lessons learned will influence real change within the industry remains to be seen – but I expect that home buyers will prefer to see their new home first hand at least.
It is difficult to predict the long-term effects, especially since we are still in the middle of the pandemic, with no real end in sight. Lenders may continue to be cautious, limit products and services, and implement conservative policies. But they might also try to drum up activity with creative solutions so the effects on the market will be minimal and nothing too drastic that we can’t come back from.
What can you do?
The number one thing you can do is to act now. If you had been contemplating a move before the pandemic, the lockdown may have swayed your decision firmly into the “yes” column. And many who had previously not been thinking of moving house realised that they either wanted or needed to.
Rates at the moment are very low, to encourage borrowing, so take advantage of the rock-bottom rates before they start to increase.
Stay in the know
If you are in the market for a new home or property, or will be soon, connect with us on LinkedIn, Twitter, and Facebook for articles and information about the UK Property Market. Don’t forget to subscribe to our newsletter to get monthly updates directly to your inbox.
But the most important thing you can do is to work with a mortgage adviser. It is their job to stay up to date on the constant changes occurring in the market. An adviser that specialises in the dental and medical profession is the best placed to help you find lenders that know the industry and understand the often unique situations that come with working in the field. Don’t hesitate to reach out to us today.
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