Money and houses
House sales fell by 53% in April 2020 compared with April 2019. We can all guess why - it's the big asteroid that fell on London. Or maybe the pandemic. House prices fell in May 2020 by 1.7%, compared with April 2020.
It isn't difficult to guess why. "Stay at home" means "Don't go looking around other people's houses with a view to buy". It also means, "Is your job safe? This time next year, will you be able to pay a big mortgage?"
In March, people were offered a three month mortgage payments holiday. That meant, of course, that their interest bill was still piling up; the gift was that this wouldn't affect their credit rating.
The Treasury has said that those who need to, can have another three months. No statement about credit rating. I suspect that this will have an impact; lenders are more reluctant to lend to people who have problems repaying.
There were 1.8 million mortgage holidays, 877,800 freezes on credit cards and 608,000 payment holidays on personal loans. Nice for the holiday makers, bad for the banks.
A friend of mine is a programmer. He's been working remotely for some weeks now. The company he works for, has decided that they don't need their premises any more, so they haven't renewed their lease. The landlord now has an empty property, not attracting any rent, but he still has to pay property tax. That landlord is going to be increasingly keen to let that property, as are many other landlords. The glut of empty properties, will push down rents.
There's a lot of financial pain falling on the country, it won't be fairly distributed, and this situation will take a long time to resolve. I'm expecting a big fall in property values.
And remember - if you get called by a contact tracer, tell them that you've been in close contact with Dominic Cummings. And any other politician whose name you can remember.
I am a subscriber to OurProperty.co.uk monthly updates for property sales to half a dozen postcodes (because I'm nosy). There are usually 6 or so sales for each area of interest. I've just received their update for May 2020 and not a single one showing at all.ReplyDelete
If you aren't sure of your financial future, you might delay the risk of buying a house.ReplyDelete
If you think that house prices are likely to fall, you'll hold off buying.