Due to Coronavirus, the property market was temporarily on hold with thousands of buyers and sellers stuck in the middle. However, since mid-May, things have started to go back to normal and the demand for housing has increased with property prices increasing by around 1.9% according to Rightmove. There is now an increase of properties going live on the market compared to last year, with a significant increase of homeowners filling out property valuations. This could be due to change of circumstances, what homeowners need within a home, for example a Garden or a study due to change of working at home and Lockdown. It could also be that before property prices increase further, those that are looking for larger properties may feel that now would be the time to get a better deal.
READ MORE: https://www.rightmove.co.uk/news/articles/property-news/rightmove-house-price-index-june?utm_source=uknewsletter&utm_medium=email&utm_campaign=newsletterjune320utm_content%3Dheroearlysigns&fbclid=IwAR2DN4xTx6LEJZG1JAFlXaqJ5EChdoDVrfMo2GmtwqwCd2Nr5wIk6gXKE_8
There seems to be an increase in Northern English towns, whereby homeowners are moving away from city areas into smaller towns. The Telegraph noted that eight out of the ten places in England that were recording biggest jumps since Lockdown were all in the North of England which was shown by Rightmove.
First time buyers however may find it difficult as Nationwide announced yesterday that its rates for that group were going to be tripled. This is due to the uncertainty within the mortgage market so therefore would be “lowering the ceiling for Mortgage lending to new customers”. This then helps Nationwide if property prices drop and negative equity is created. Yet this means for those customers, rather than having a mortgage from Nationwide at 95%, it would be reduced to 85%. But this means those originally looking at £5,000 mortgage deposit on a £100,000 property, it will now be £15,000 deposit. Which may then result in an increase in the rental market. The director of mortgages at Nationwide, Henry Jordan noted: “As a responsible lender, Nationwide needs to ensure borrowers can afford mortgage payments and are, as much as possible, protected against the potential for negative equity, should house prices decrease … Our priority at this time must be to help members keep their homes.”
Other mortgage lenders are yet to do the same, however there is a chance that they may follow.
READ MORE: https://www.bbc.co.uk/news/business-53084853