How Property Market Reacts to Corona?
The prevalent mess in economies due to corona skips no part of the economy and affects the core of stability. Of course, real estate cannot be an exception and have to confront the alterations that the notorious COVID-19 applies to.
All on the same boat
Builders, selling agents, buyers, mortgage lenders, brokers all are in uncertainty. Every aspect of the market has something to experience in some or other way. Why not have a look at what is happening in the industry and take a feel of tomorrow.
Drastic price fall
Good news for someone can be bad news for someone else. The real estate market has become an exact reflection of this situation. According to the assumptions, there is a sharp price fall that spans from 5% to 35%, and that is certainly huge.
At one side, home buyers are happy; on the other hand, the builders and agents are not. But no one has no choice. The only thing for the property owners waiting to sell is to wait and watch.
LTV percentage falls to 60% -
Big, small, every lender worked immediately on its LTV. For a while, gone is the time when the struggle was to get 80%, 85% or 90% LTV. Now, the minimum is 60 to 65%, and even those that offered 100% funds have to withdraw their higher LTV mortgage products. People are trying to get only the best possible by hiring an online mortgage broker in the UK from the abundant but weak market.
Due to the decrease in percentage, the deposit amount need has become more prominent. Many lenders have decided to lend money to those with at least 25% equity. It is an uncertain situation with loose ends, and it seems that no one is there to hold it back.
Sellers on a halt but not all want to wait
Something affects all on such a vast level is sure to show its impact on every side. Buyers, lenders, brokers, agents have their own experiences. Now the turn is of homeowners who want to sell their assets and earn a significant amount of money.
Many have postponed the sale for an unsure period and have to wait for the comeback of normalcy. They cannot compromise on the property price after a limit. The countries where the price fall is not too sharp, the homeowners still have plans. They have their sanitizer packs ready to ask the prospective buyers to clean their hands. Despite the less zeal in the industry, they want to explore the maximum height of possibility.
Existing mortgage applications will stay under progress
The lenders have declared in many countries that they will not stop processing the mortgage applications of the existing applicants. They do not want to extend the waiting period of the applicants as procedures are already slow. There is no logic to turn an already bad situation into the worst.
The fund seekers find this decision good news too. Before the pandemic virus started, they were all set with their deposit, documents and of course, the excitement to buy their home. However, still, some of the buyers are in doubt of the consequences that the current situation may bring.
Fixed mortgage deal is difficult to attain
The high level of instability has introduced a new fear that says, the applicants may not be able to get a fixed mortgage deal. The reason is known to all. With sundry possibilities of risk, the lenders have no other choice. They are more inclined towards the variable rate method to keep the threat on the repayment part as less as possible.
The borrowers may find it harsh against their wish, but the fact is they may have the benefit. The reason is, currently even if someone qualifies for the fixed-rate, that will not be much low. But the variable rate has more chances to get low due to its volatile nature. However, still, if there are any good deals available on the fixed-rate, brokers can help to find them out. The borrowers are already quite confused about what they should do and where they should go.
Whatever is the current situation, the one known thing is that patience can be the only tool to tackle the tough time. The need is to remain positive about things. The lessons that this uncertain time teaches are precious because it makes people stay ready with proper financial back-up for the wrong time. Knowing the ultimate reality that life is always unpredictable. Nothing can beat the capacity that helps you read the future. Stay calm, stay rational, and things can be better. The most important thing is to remain focussed and healthy because all plans for property investment cannot complete without good health.
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