How COVID Has Impacted The Market For Buyers
*This is a collaborative post but all thoughts on how COVID has impacted the market are my own
If you’ve been reading my blog for a while then you’ll know that we bought a house earlier this year. We actually picked up our keys on the very first day of lockdown. So the day was a little different than how we’d imagined it. We pushed so hard to ensure we completed on that day as we didn’t want the house sale to fall through due to lockdown. We were lucky, but many others weren’t.
I did a whole post about how COVID has impacted the market for us and our move. But I wanted to do a post about the market in general.
How COVID has impacted the market for buyers
Stamp duty
One of the biggest ways COVID has impacted the market for buyers is the Stamp Duty Land Tax holiday. The holiday started in the summer and is due to finish on 31st March 2021. Before the holiday was announced you paid stamp duty on any priced property if you weren’t first-time buyers. Or if you were a first-time buyer and the property was over £300,000. So with the holiday its made a huge difference for buyers. People who were already homeowners thinking about moving may have been swayed to move with the holiday.
But there are calls for the government to extend the holiday. Paresh Raja, CEO of Market Financial Solutions, has said:
With the holiday coming to an end on 31st March 2021, we are now facing the opposite problem – the market simply does not have the capacity to meet buyer demand. Mortgage providers are taking longer to process applications, and the lack of available loans has made findings the right type of finance difficult for prospective buyers.
My concern is that this will lead to a backlog of sales, and could result in many buyers missing out on the holiday due to the fact that lenders are simply not able to release the volume of loans needed.
How COVID has impacted the market on viewings
In early lockdown selling a house just couldn’t happen. Estate agents were closed and physical viewings weren’t allowed to happen. Back in May viewings opened again but things are very different from how they used to be. Most people will do a virtual viewing from home before choosing to do a physical viewing. In this respect, I think it’s a positive as you get an idea of the property before committing to a viewing.
In most cases now you have to look around the property on your own. So the owners have to be away or outside the house when you’re going around. And for most, the estate agents can’t be with you. This can be tough as it might take longer to get answers to questions. Or you may not get the information you need. But it’s for everyone’s safety.
Applying for a mortgage
COVID has impacted the market massively when it comes to applying for a mortgage. Before you think about applying for a mortgage you can use a mortgage calculator to get an idea of how much you’ll be lent. We did this a few times before applying for a mortgage.
But as there’s less job security for people so lenders are having to be stricter about how much they offer people. Because of this, you may need a higher deposit in order to secure a property of around 10-15%. We actually put a 15% deposit down on our house, but for some people, this may not be possible. In contrast, some places have dropped their rates in order to make it obtainable to be able to move.
In terms of timings, a lot of providers are taking longer to process applications. So moving house may take a lot longer to happen than pre- COVID.
Other ways COVID has impacted the market for buyers:
- If you’re part of a chain you may not be able to find a property to buy until you’ve sold yours/ had an offer locked in
- Interest rates have been reduced to a low of 0.1% which means it could be a great time to re-mortgage and get a better deal
- What you’re looking for in a property may have massively changed because of COVID. If you’re working from home you may need more space for a home office. And a garden might be a bigger priority to be able to get fresh air and exercise
Have you moved during COVID or thought about moving?
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19 responses to “How COVID Has Impacted The Market For Buyers”
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Rhian Westbury
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We started moving the morning of the day lockdown was announced for the first time, finished a day in. It has really impacted the market completely, I think we will be seeing both the benefits and the repercussions for months to come.
It’s all very crazy right now! I’m not particularly keen on going anywhere, so the people who actually want to buy a house and move now are much braver than I am!
There are pros and cons to the market at the moment, but I am liking the idea of virtual viewings… however, not quite the same as viewing a house in person. Sim x
I like the idea of a virtual viewing as you may automatically rule something out and it saves you actually having to view it, but I’d need to see somewhere in person to commit x
This is an interesting read, I haven’t taken much notice of the housing market, as much as I would love to buying a house isn’t possible. Hopefully it will level out over time and become more stable again for everyone.
We had plans to move this year but that has all gone to pot and I am gutted if I am honest – house prices are going up and up here too
I’m so sorry to hear that, hopefully they’ll go down a little in the new year x
Covid has definitely impacted the sale of houses and how their are being viewed. In my area, lots of houses are still being sold but rental has fallen
It’s definitely a weird time for buying and selling houses but life still goes on and these things have to happen. It just seems much slower sadly, for my friend who is moving now. Mich x
My folks put their house on the market in July this year and sold it within 2 weeks, the market moved so quickly once the first lockdown lifted, they are now waiting to exchange fingers crossed but Covid has massively affected timescales x
Yeah I think so much was held up during the first lockdown that there was so much to get through after that, where as this time places have had time to work out alternatives x
I know a few people that have taken advantage of the stamp duty holiday. It’s a great way to save money and the savings can be used on the property once purchased.
Exactly, or you can put a bigger deposit down so you’re borrowing less, any way to save money! x
My friend was due to move four weeks in to the first lockdown but unfortunately it never went ahead for various reasons and she still hasn’t moved.
Oh wow that’s such a shame. I think I was super lucky to get our keys on the first day of lockdown just in time x
This lock down has made a big impact on property buying and selling. Property prices have dropped too, I hope things pick up soon.
I hope they do as well as it’s such a shame that so many people’s plans have had to change x
I feel for people trying to sell their properties at the moment it definitely is a buyers market. We were looking at properties last weekend and were saying about prices
It’s had such an impact! From trying to save for a deposit to showing enough income. ONE DAY I will get there!
Yeah we’ve had to dip into our savings this year and if we hadn’t bought it would have come from our deposit I’m sure of it x