Is now a good time to buy or sell a house?
Last week, we investigated whether people are able to view and move house during the pandemic, and what the rental market looks like right now.
The official advice is that it’s best to avoid it where possible, but it’s not technically against lockdown rules so long as social distancing is followed.
This week, we have asked property experts to share their insight on home ownership and answer the question: is this a good time to buy or sell a home? And what are the pros and cons?
Let’s find out. Is it a good time to buy property? Right now, it’s a buyer’s market, so if you’re not afraid of a little risk, this could be a good time to buy property – but don’t rush into it.
‘Post-lockdown, investments will be a slight gamble, it’s a question of how can you swing those probabilities in your favour,’ Charlie Gibson, co-founder of Oliver Bernard, tells us. ‘Be bold, buy smart, and hold on. Interest rates will remain low, many will feel the financial squeeze as unemployment soars.
‘If you’ve access to capital, bid fiercely and do it now.
You would be naive to expect an immediate 15% reduction in guide prices upon market return, but I can guarantee, if you put a bid on the table, 20% below the asking price, those in need of liquidity will find it very difficult to say no to.
‘Be patient, take a 10-year view, the recovery will be a long time coming, but remember, there is no better track record than that of our great capital, London.’
If completing a sale right now merely fills you with dread, there are other preparations you can make, before money changes hands.
‘For prospective homebuyers, now is the time to prepare and ensure you have everything in order so you can press ahead with a purchase once the lockdown is relaxed,’ says Jamie Johnson, CEO of FJP Investment. ‘This is particularly true when it comes to assessing your mortgage options.
More and more lenders are not taking on new applications, while others are retracting on mortgages that had already been agreed in principle.
‘Take this opportunity to consolidate your finances and find the best mortgage products available – this will put you in a stronger position once something resembling normality returns.’ By all means, do your mortgage prep but prepare yourself for difficulties obstaining the actual mortgage right now.
‘The latest news suggests that buyers will find it difficult, but not impossible, to get a mortgage,’ Miles Robinson, head of mortgages at online mortgage broker Trussle.
‘This will likely depend on how far along they are in the process and the size of their mortgage loan. Some customers whose loan-to-value (LTV) is over 60% will require a physical valuation, depending on the lender. ‘However, some lenders are able to conduct valuations via Automated Valuation Models “AVM”.
While lender rates can be reserved, applications may be delayed.’
Is it a good time to sell property?
Be prepared to prices to drop, but don’t get discouraged, explains Jamie. ‘Let’s be realistic – house prices are likely to drop over the coming months as an immediate reaction to the lockdown measures imposed by the government,’ he says. ‘For homeowners, they must not panic; history shows that house prices recover well from sudden market downturns. ‘My advice to homeowners is to wait for the market to bounce back.
After all, not only are prices likely to dip, but selling a property will prove difficult at a time when valuations and surveys cannot easily be completed.’ Recent figured from the property website Rightmove reveals that the average price of property is now £311,95, down by 0.2%. Comparatively, at this same time last year, prices increased 2.1%.
With that in mind, if you can hold off on selling, it’s likely a good idea to do so, though it’s worth noting that Rightmove said that the data isn’t ‘meaningful’ due to the lack of a ‘functioning market’ right now.
So even if you wanted to sell, you might struggle to find a buyer willing to move in the current climate.
James Pace, partner and head of Knight Frank’s Kensington office, tells us that it’s still good to remain active on the market, as even if people don’t buy now, they’re definitely browsing.
‘Because everyone now has more time on their hands, it’s a bit like Boxing Day – this is historically one of the busiest times when people look on the web to see what’s out there – so be available to ensure that you get their attention,’ he says.
And if you’re bored in lockdown, this is also the perfect opportunity to make some changes that could see you land a better price tag for your property.
For instance, create a walk-through tour of the home on an iPad or smartphone, which will add a ‘lifestyle element’ beyond what the buyer can find in a brochure or on a website.
This might further entice them to book a viewing once the COVID-19 crisis is over. If your property needs work, get on it now (so long as you continue to follow government guidelines).
Get those front gates repainted, tidy up the driveway by removing any weeds and get all those small bits and bobs organised, so that the property gives a great first impression to post-pandemic viewers.
Then tackle the inside. ‘This time at home is giving people the perfect chance to reconnect with their houses,’ adds experts at Knight Frank.
‘Clearing out the cellar and sorting the loft out for instance make the spaces much easier to show in the future. You can also probably find loads of things that you no longer need and can sell on eBay.
‘As we are all spending much more time in our homes, this also presents a great opportunity to rearrange your rooms to make them appear as spacious as possible.’ Whatever your decision, on selling or buying, bear in mind that the UK is not yet (at the time of writing) past the peak of the virus, meaning that lockdown could be extended again. It will be quite a while before the market goes completely back to normal.