The leaves on our Virginia creeper are starting to turn red and there is now a little chill in the air. The sun is still shining and the House and Holiday Home inbox bristles with Holiday Let enquiries and residential 1st, 2nd or 3rd time buyers. COVID knocks impolitely on the door (after or before 10pm) but still the buyers come.
As the days whittle by, I understand what’s happening more and more.
The spring lock down caused unprecedented demand in the housing market. In June, decisions were made and Mr Sunak poured a little petrol on the housing BBQ with his stamp duty relaxations. The word “Staycation” appeared everywhere and suddenly buying in Cornwall, Devon, Scotland, and The Lake District et al seemed a great idea.
No-one really likes buying at the top of the market in any commodity and everyone likes to tell you they bought at £x and sold for £x+, so what are my views when it comes Autumn 2020 and houses and homebuying?
Lots of younger borrowers are asking me if they are mad buying now.
Listen, I cannot and will not predict price rises or falls. That is a game for others. But what I will do is say this. If you are buying a home to live in for the next 5 – 10 years, then are you really concerned?
You are buying a home and if you don’t have to sell it owing more than you borrowed, I don’t get the problem. Put this another way. A young couple said to me recently that they would take their chance and rent and hope prices fall. I reminded that the rent would cost say £8,000 and that number would need to be factored into their strategy.
Of course, I fully get that the 95% mortgage has gone to the moon and the 90% loan only appears at the same time as Halley’s Comet. So, yes lots of FTBs cannot buy and I feel for them.
What about selling now, renting, then buying when Strictly Come Dancing has 4 competitors left?
Well, see above, and remember that you will have more moving costs, storage costs etc.
What has COVID done to house prices?
There is no doubt people have wanted to move to more rural areas and leave more built up areas.
Many firms are saying employees can come in 2 days a week, so the grind of the long commute will be lessened meaning people are looking further out of town as it were.
Then of course there is that nasty elephant in the room wearing his corona waistcoat…
We just don’t know how many jobs will be lost. One job loss is too many but, writing objectively, I think it may be the renters who get hit hardest, which of course will affect those landlords and buy to let mortgages somewhat.
Lenders are valiantly trying to lend money but like many industries they face big challenges.
They must balance risk with commercial desire. They still don’t have all their staff in and working, and as a broker in 2020 I know what it is like to wait well over 60 minutes on the phone.
I know what it’s like telling a customer after 3 weeks of hearing nothing that I simply cannot bump him up the queue.
It is not easy; patience and good communication from us are essential to make sure expectations are managed and at the moment I really worry about the last two weeks of March when the stamp duty holiday packs his bags and goes home.
I asked Joe Stallard if I could have a holiday that fortnight. His reply is unprintable.
I conclude by getting my “he would say that wouldn’t he” car out of the garage.
If you or a family or friend is looking to move, just get the best advice available.
Not all solicitors, estate agents, surveyors and mortgage brokers are the same.
Get a quote but also make sure they engage with you in a way which gives you the confidence to be able to work with them in what is a really tough, tricky time.
Only yesterday a first-time buyer enthused to me that he would never have been to able to make that big house purchase without our help. Every case is different and presents its own challenges and that’s why we love helping you.