By Miles Dilworth Should you make YOUR MOVE?
Property sales ground to a halt as the pandemic took hold... but is now REALLY a good time to buy or sell? Read Money Mail’s
IT was a different world when Valerie and Paul sanders* agreed to buy a £700,000, four-bedroom home in Orpington, Kent.
They were cash buyers and the vendor was moving into rented accommodation; there was no chain, no hold-ups.
But with the exchange scheduled for March 23, the day the UK entered lockdown, the sale became one of around 450,000 deals put on ice.
after the Government restarted the property market in England last wednesday, the couple are now among thousands of buyers and sellers grappling with how to progress their move in an unrecognisable market.
scots are still advised to stay home, meaning physical viewings have halted, while the land registry service has closed during the pandemic. However, estate agents say there is still interest in the market and offers are being made after virtual viewings
Money Mail has spoken to property experts across the country to help you navigate the confusion.
WHAT IS HAPPENING TO PRICES?
KnIGHT Frank says prices may have dropped by 5 pc since lockdown. It forecasts a further 2pc fall by the end of the year before they begin to recover.
But Lloyds Banking Group has said a ‘severe scenario’ could see house prices fall by 10 pc by the end of the year and 30 pc over three years, although a 5 pc fall by the end of 2020 is more likely.
The Royal Institution of Chartered surveyors (RICs) says it does not expect a recovery until next Easter at the earliest.
AS A BUYER, SHOULD I RENEGOTIATE?
BUyERs can renegotiate the price before contracts are exchanged. Last week Money Mail revealed some were already seeking discounts of up to 20 pc.
Property expert Henry Pryor says a responsible approach should be sought. ‘Just say: “sorry, the deal doesn’t work like it did before,” This is about accepting the reality of a global crisis.’
But Jeremy Leaf, a north London estate agent and former chairman of RICs, says he is yet to see any of his clients try to renegotiate. Mortgage lenders may ask to revalue the property if a lower price is agreed.
But if you pull out of a deal after exchange, you may be in breach of contract and vendors can sue for losses and could keep your deposit.
WHO CAN TAKE ADVANTAGE?
‘sECOnd-sTEPPERs’ may find the discount on the larger property they wish to buy is greater than the fall in value of their existing home.
Rob Houghton, chief executive of comparison website Reallymoving, says while negative equity is a risk for those who bought recently with small deposits, those who bought their first home more than five years ago can withstand any shortterm price dip.
This could free up stock for firsttime buyers, but they may find it harder to get a mortgage. Lenders have cut offers for those with deposits of 10pc or less by more than 90pc, says data firm Moneyfacts.
WILL MY MORTGAGE BE WITHDRAWN?
BanKs are reviewing offers to households whose circumstances have changed during the lockdown, and could withdraw deals even if contracts have already been exchanged. This could lead to loss of deposit.
anyone who has been furloughed since agreeing a mortgage may have to renegotiate their offer. you may have to take a small loan or a longer mortgage term.
Most banks have said they will count furloughed income towards affordability checks, but Virgin Money does not.
Lenders are clamping down on borrowers using bonuses and commission to support their income, while the self-employed are also having their applications scrutinised in greater detail.
SHOULD I HOLD OFF ON SELLING?
BanKs have restarted physical valuations in England and property website Rightmove reported a 111pc week-on-week increase in new sales listings on the day the market reopened. But steven wayne, of Benjamin stevens estate agents, says it is important your property does not get ‘lost in the crowd’. He says it will take a few weeks for buyers to get used to the idea of visiting homes again, so if you list now, you might jump the gun. He adds: ‘you only get one chance to make a first impression.’
WHAT ARE THE NEXT HOT PROPERTIES?
THERE has been a surge of interest in rural areas or smaller towns as households adjust to working from home. savills says there has been a rise in buyer registrations in winchester in Hampshire, newbury in Berkshire, Canford Cliffs in dorset and the East neuk of Fife.
Rightmove director Miles shipside says high demand could boost values for properties with home offices or large gardens. But premiums placed on transport links may diminish.
* NOT their real names.