COVID 19 and Kent Mortgages
Updated: Apr 2, 2020
Not many of us could have predicted the current COVID 19 epidemic and how it would affect all of our day to day lives. Amid current conditions we still continue to proudly provide mortgage advice throughout Kent as well as helping people secure life insurance which seems more relevant than ever.
Following the election outcome of a Conservative majority government it was predicted that a property bounce would happen with Brexit uncertainty starting to reduce. Market data shows a strong burst of renewed buyer confidence in the first two months of the year with property prices continuing to rise throughout Kent. Mortgage rates remained low, allowing us to provide welcomed advice to buyers and remortgage clients. In Kent the average property value increased by 3.12%, currently standing at £353,854 - a rise of more than £11,000 since March 2019. This is based on 41 towns from Ashford, Canterbury, Whitstable, Maidstone, Tunbridge Wells and beyond.
The UK has stepped up its plan to delay the spread of the Coronavirus by encouraging buyers and sellers to delay transactions. This was prompted by practical concerns including the dangers of removals, viewings and the general face to face interactions involved in the house move process. However the ministry of housing did state 'there is no need to pull out of transactions' and in theory if a mortgage has been offered it should still complete so long as the chain does not break, with delays expected especially on house moves due to the 'stay at home' guidance.
Naturally the buying market will slow down as some lenders continue to remove most deals above 60% Loan to Value, meaning no new lending unless you have a 40% deposit or equity with certain banks. This is partly because lending above 60% LTV tends to require a physical valuation on the property which is not possible with the UK being in a state of lockdown. Lenders, like a significant percentage of the population are also in lockdown.
There will be some potential benefits to the property market. Following the recent rate reduction to 0.1%, most lenders have taken the decision to lower their standard variable rates. This will not affect the majority of mortgage holders who are on fixed-rate mortgages. However, Fixed-Rate's continue to remain low so if your mortgage is up for renewal in the next 6 months we can work towards locking in a new deal now.
If we look upon history there is hope based on previous uncertainties. While the 2016 EU referendum caused some short term wobbles in the market, prices continued to rise in the long term. In a recent Forbes article by Gary Barker he states 'History has certainly shown that while markets do take a fall during an outbreak, they are usually resilient and bounce back relatively quickly once the issue is resolved'. Using the example of swine flu which came to the UK in April 2009. House prices still rose by over 10% from March 2009 to March 2010. Time will tell but there are reasons to stay optimistic.
Technology will play a big part in keeping the housing market moving. At Avant Garde we can provide advice using a simple remote service. We will continue to offer Mortgage advice throughout Kent during these times of uncertainty.
Dean Laidlaw - Mortgage and Protection Adviser
T: 01233 647222
Your property may be repossessed if you do not keep up repayments on your mortgage