As we are still in the middle of the Coronavirus shutdown here in the UK, it is hard to see where things will ultimately end up with regard to the property market. It is expected that as we continue into the second half of 2020 and the property market starts to slowly come back to life, a number of transactions will end up falling through.
There are many factors at play contributing towards an increasing level of property sale fall-throughs. Here are some of the main points to consider:
Property prices considered likely to fall
We are in uncertain times and indeed uncharted territory when it comes to the potential impact on property prices. Needless to say, a large number of people believe that the impact initially can only be negative when it comes to house prices. The evidence of this will be borne out over a period of months as Land Registry releases house price transaction data showing the actual sale prices of specific properties, from which national and local averages can be calculated and indeed compared against previous months.
A seasoned UK property buyer had the following to say when asked about the impact of Covid-19 on UK house prices – “It is just too early to see how property prices will be impacted by Coronavirus.
In essence, the music has stopped in the property market for now and it is only when transactions start up once again will we be able to see clearly what the prices are. We must remember a property is worth what someone is willing to pay for it.” By means of comparison, the 2008 crisis brought with it house price declines here in the UK exceeding 10%, and following on it took many years for prices to return to levels previously seen.
Rise in unemployment rates
Unemployment rates have seen a rise over recent weeks with employees concerned over their future job security. This has led to home buyers being more careful when it comes to taking their next step on the property ladder. As the year continues, it will become more apparent which jobs are considered safe and secure going forward and hopefully this will give home buyers confidence to continue their property journey.
Changing mortgage products
Mortgage products available in the market are continuing to change quickly, with some being withdrawn and the criteria on others changing. This directly affects borrowers and their ability to secure financing for the purchase of their new property.
These changes we are seeing in the mortgage market are resulting from house price uncertainty as well as lack of visibility in the employment market, consequently leading to lenders making quick changes to their mortgage products. You may find that certain properties (short leasehold flats, agricultural, non-standard construction amongst others) are impacted more significantly by changing mortgage lender requirements.
Uncertainty when the country will be back to normal
As we have never experienced such a situation previously, individuals are inevitably taking a careful approach particularly when it comes to making infrequent and large financial decisions such as house purchases. When we look overseas to countries that are considered ahead of us in this recent Coronavirus situation, we are starting to see the green shoots of normality showing and this could give us some indication as to what is coming next for us.
Property sales market has been temporarily put on hold
The property market has in essence been put on hold temporarily with viewings unable to take place, property surveys and valuations not happening, conveyancing processes being delayed etc. Consequently, there is just more of an opportunity for the situation of anyone selling their home to change and deciding to take their property off the sale market.
These are just some of the various issues at play in the property market that may increase the risk of property sale fall throughs. It is inevitable we will see a number of people choosing to discontinue a current home purchase that is currently in legals, however the actual numbers remain to be seen.
If the purchase of your property has fallen through or is looking unlikely to proceed, you can always look to the services of the London fast home buyer LDN Properties. They are a national home buyer providing a professional quick house buying service throughout the UK and also within London.
Whether your sale has fallen through or you are looking for a chain break service, no matter what the reason you have for selling your home they are typically able to make you a committed offer within a timescale that suits your requirements. By having a committed buyer for your property in place, this can well assist you when it comes to presenting a credible offer on your next property and may well allow you to obtain a discount.