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Good news for house buyers?

Posted on 20th April, 2020

According to some sources, housing prices are to potentially drop by 10-13% – so, who can benefit?

The global pandemic that is COVID-19 has cost the country millions of pounds.  Not to mention, it has cost the public thousands in loss of income.  And to top it off, everyone’s property is also potentially going to decrease in value by up to 10-13%. This means an average of £30,000.00 reduction in house prices across the UK. Of course, in the North East this won’t be quite as extreme, as our average house prices are lower than those in the South of the country. I know what you are thinking, where are the positives?

First Time Buyers

Those who may bode well during the coming months are that of First Time Buyers. All those with savings who were almost able to afford their first home may now have more than enough money to make an offer due to the discounted prices. Not to mention due to the Bank of England Base rates being cut, this would mean better mortgage rates are likely to appear more favourable to the first-time buyers out there. Although first time buyers have the most to gain from the housing dip, there are others who could see some benefits to the house prices dropping.

Re-mortgaging

As previously mentioned, the average rate on a mortgage is likely to drop due to the Bank of England Base Rate being cut to 0.10%. Therefore, if you are due to re-mortgage this year then you may be able to tie up a 2-5-year fixed rate deal with a good interest rate. We cannot advise on Mortgages further than this, but it is something to keep an eye out for.

Help to Buy Equity Loans

There will be many people in the UK who bought a new build property back in 2015/2016 who would be looking to repay/redeem their Help to Buy Equity Loans before they must start paying interest on the same. The amount you pay back is either the same amount you were granted on purchasing the property or 20% of the current home value (whichever is higher). Home values dropping could save many people money in that they may only be paying back what they initially borrowed rather than an inflated amount that may have been payable had the housing market not dipped.

Of course, it is impossible to predict what is going to happen going forward in this pandemic and we can only hope that everything returns to normal as soon as possible. In the meantime, we may as well take whatever positives we can from the situation we are currently in. If you are interested in any of the aforementioned points, then please do not hesitate to get in touch for a quote by emailing dtumilty@jacksons-law.com or call 01642 356500.

Daniel Tumilty, Solicitor, Residential Conveyancing

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