I have already had a first-time buyer write to me asking if the current pandemic should affect their decision to go ahead and buy their first home?
As to whether now is a good time or not is a toughy. Regardless of what the bigger picture is, a first-time buyer (or any other buyer) is buying a place to live. It is not a speculative bet on the property market going up or down.
If they can afford the monthly payments, that is the main thing. Interest rates are low and likely to remain so for some time to come.
I recommended speaking with their lender and find out what their exact procedure is. Are they offering a payment holiday for all mortgagees, including people about to embark on the property ladder, for example?
The market will definitely slow but not necessarily drop/crash. The very nature of a virtual shutdown will impact appetite to buy or sell and to view.
No one knows how the pandemic will affect house prices, and the pace and scale of its spread is uncertain; uncertainty is never positive for a market.
But until recently, the housing market was at its most solid since before the Brexit referendum. A wobble is anticipated, as a rise in people self-isolating may see fewer properties coming to market, but this will hopefully be short-lived.
The Bank of England's effort to shore up the economy as it struggles under the ongoing health crisis has a silver lining in the shape of lower interest rates.
A lower base rate means typically lower mortgage rates with borrowers on tracker rates benefiting first. But those looking for a new mortgage or remortgaging may also find cheaper deals.
We're on a small, well-populated island and supply & demand are well balanced. Most likely, the market will stagnate, and when this is over, latent growth will spring back.
My book doesn't address the current Covid-19 circumstances, no. However, there's plenty of useful tips and links for someone in a similar position, such as:
- Mastering your budget and figuring out what they can afford
- Finding your first home
- Choosing the best mortgage, solicitor and surveyor
- Negotiating the purchase
- Managing the stressful run-in to exchange and completion
With great advice, resources and links throughout, I hope "The First Time Buyer's Guide" will help you navigate the journey to your new home as well as give you some food for thought while you decide what to do in the current climate. A free copy's available via the link below: