With the impact of COVID-19 crisis becoming a stark reality over the past few weeks, the number of mortgages decreased as many lenders reacted following the emergency rate cuts implemented by the Bank of England last month.
With the roll out of mortgage payment holidays, banks and building societies were inundated with over a million requests and their resources have been focused on assisting existing customers to help them mitigate unforeseen financial difficulties.
As a result, most new lending has been either been put on hold, or only available to those with sizeable deposits or equity of 40 per cent or more in order to reduce lender risk. This had led to many lenders withdrawing many rates for those who require higher loan to value (LTV) products.
In recent positive news, it has been reported that higher LTV mortgages are being reintroduced by some lenders which is optimistic news for the UK property market and shows that lenders are keen to assist borrowers and promote consumer confidence.
Most significant is the gradual reintroduction of higher LTV products which may assist both first time buyers who want to take the opportunity over the next few months of any cooling in prices, and existing borrowers who need to remortgage at the moment, yet who have a lower level of equity in their property.
George Sifonios, Managing Director at David Astburys said, “The initial focus for reopening the economy should be on sectors that have the greatest multiplier effects with minimum risks and the property market is one that has wide multiplier effects. The focus is to avoid a stop-start economy which would sap public morale and damage business confidence further.”
It will be difficult to gauge the impact of coronavirus on house prices in the short term due to the slow down in the market, but it appears that many homeowners are still requesting valuations of their property and this is validated by the on-line Val-Pal network which states they are seeing close to 1,000 requests a day.
There has also been no mass exodus of properties from the market following the coronavirus lockdown according to Zoopla, with stock levels per agent on 7th April just 1% lower than 7th March. Zoopla reported that new buyer enquiries have fallen by 60%, although the portal report there has been an uptick in online property searches over the past week.
Yianni Aresti, Founder and Lettings Director at David Astburys said, “The lettings market is still active, people still need to move, and we have been servicing our clients with virtual viewings and have seen an increase in the number of valuations coming in. We offer free instant online property valuations to anyone with no obligation who is wondering what their property is worth and people are utilising this service.”
Rental values have risen by 8.7% over the past five years (Jan 2015 – Jan 2020) according to the Office for National Statistics. Average rental values across the UK rose by 1.4% in the year to February (IPHRP) with the highest annual growth currently in the South West.
However, the RICS Residential Survey reports the Coronavirus is having a negative impact on near term rental growth, with rents projecting to stagnate over the next 12 months. Fortunately, the 5 year forecast remains positive with an average annual growth of 2.5%.
For Landlords, from 1st April 2020 all rented properties must hold an EPC rating of E. Landlords of properties below this rating with existing tenants are obliged to carry out works worth up to £3,500 to improve their energy efficiency. If an upgrade to EPC E cannot be achieved within this limit landlords are required to register for an ‘all improvements made’ exemption.
George Sifonios, Managing Director at David Astburys said, “It was reported this week in some news outlets that Estate Agent’s office’s will be in the first category of High Street premises to reopen when the lockdown finally ends, along with coffee shops and restaurants with appropriate social distancing measures in place. For us at David Astburys, it is business as usual, we continue to service our clients remotely and are following the Governments guidelines to ensure the health and safety of our clients, staff and the community at large.”
David Astburys Estate Agents
Address 15 Park Road, Crouch End, London N8 8TE
Opening Hours: Mon – Fri: 8.30am – 7pm Sat: 10.00 – 5pm
Tel: 020 3000 6787
Email: [email protected]
Website: www.davidastburys.com
