The government has effectively suspended the housing market with the lockdown to control the spread of the Coronavirus pandemic.
There are 373,000 property transactions unable to complete worth £82 billion says Zoopla Cities House Price Index with demand down -70% as the government lockdown suspends the housing market.
Many first time buyers are unable to meet the new lending criteria of smaller loan to value (LTV) coupled with no property viewing or valuations allowed due to the measures.
Lenders are focusing on existing customers and remortgage buyers at the end of your mortgage deal, can switch to a new preferential rate reducing your monthly repayment costs.
By the end of April Zoopla reported a recovery in demand which is still -60% lower than at the start of the month and browsing levels remain -37% down compared to the start of March.
Lockdown yet to impact prices
House prices remain steady rising 1.8% year-on-year and with agreed sales down by 90% on the year there will be reduced pricing data available over the next two to three months.
Lenders have moved to desktop valuations although home movers and buy-to-let investors must wait until restrictions are lifted before we see growth in agreed sales.
This Zoopla table shows the leading ten city house prices and growth year-on-year to March 2020.
| City | Current price | Annual growth |
|---|---|---|
| Nottingham | £159,100 | 4.1% |
| Leicester | £182,100 | 3.9% |
| Manchester | £174,100 | 3.4% |
| Edinburgh | £239,200 | 3.2% |
| Leeds | £169,200 | 3.1% |
| Liverpool | £122,600 | 2.6% |
| Birmingham | £168,500 | 2.6% |
| Cardiff | £212,100 | 2.5% |
| Sheffield | £139,600 | 2.4% |
| Glasgow | £124,300 | 2.0% |
Demand has been stronger in Northern cities in the last few weeks such as Manchester with average house prices of £174,100, Liverpool with prices of £122,600 and Leeds with prices of £169,200.
These cities have seen strong growth from the start of the year coupled and are affordable with the potential to bounce back faster than other more expensive locations.
Providers are using desktop valuation for lifetime mortgages allowing the equity release buyer to access cash from their home with interest rates under 3%, using this to consolidate debt or help your children start or expand a business.
Lenders have agreed to extend their mortgage offers for the moment but at some point may require another valuation once the market returns to normal operation.
50% fall in housing sales expected
The lowest monthly house sales was January 2008 with 42,000 completed and due to Coronavirus, research from Zoopla predicts volumes to continue below this level until September 2020.
As a result their data shows that there will be a 50% reduction in completed property sales during 2020 compared to the previous year.
Despite this projection, there could be an increase in demand after the Covid-19 lockdown as people expect to work from home more often requiring more space or think they can now find property at a discounted price.
Demand for housing remains uncertain and a recent survey by the IPSOS Mori reveals the most important for people is Covid-19 with the economy only second and employment back in eighth.
Mortgage rates remain very low and the government is providing support for homeowners but this may not be enough to give buyers the confidence to make a new commitment.
What are your next steps?
Call our LCM mortgage brokers for advice if you are a first time buyer, want to remortgage your existing home for the best mortgage deal, moving home or a buy-to-let investor.
Start with a free mortgage quote or call us and we can take your details. Learn more by using the property value tracker chart, mortgage costs calculator and equity release mortgage calculator.
For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your property to reduce inheritance tax owed by your beneficiaries or a garage conversion.
