We all know that 2020 was a very tough year for anyone buying or selling a house. The Covid-19 pandemic first shut down the UK housing market completely between late March and May, with the months of an effective standstill contributing to massive house price hikes, mortgage restrictions, and a shortage of houses for sale.
The introduction of stamp duty holiday in July was a silver lining, but that too has put pressure on an already exceptionally busy housing market, and has made things harder for first-time buyers, who currently don't have the stamp duty-free edge over house movers who dominated the house sales throughout the second half of 2020.
Regardless of where they were in the house sale chain, everyone found that every step of the process was taking longer, a problem that's still affecting the property market. Now that we're in another lockdown, and the stamp duty holiday is soon to end, are there any silver linings left for buyers or sellers?
Actually, there are. Mortgage Advice Burea offer their tips on how you can use the third lockdown to get yourself mortgage ready and prepared for your next home move.
1. Save up for a bigger deposit
The ONS have suggested that the average UK household was able to save £182 a week during the first national lockdown because leisure activities such as theatre, cinema and eating out were unavailable. This is a significant amount and something to be inspired by – you can make a decent saving during this lockdown that could go towards a larger deposit.
Although lenders are gradually reintroducing high LTV mortgages, a 15-per-cent deposit will still give you far better mortgage rates than a 10-per-cent one. It is worth holding off until you have a bit more because you will have access to better mortgage deals.
2. Use your free time to research your house move
Another positive that has come out of the pandemic is that some of us have a little more time that would've been taken by the daily commute. If you are considering a big move, especially from a city to a more rural area, now is the time to do a lot of thinking – and a lot of research of your potential moving destinations.
Brian Murphy, head of lending at Mortgage Advice Bureau, advises to 'research the practicalities like schools, and the daily commute to work (if you’re not working from home), as well as other amenities you’re used to having on your doorstep, whether that’s bars and restaurants or a gym, once places begin to re-open. If your chosen new location doesn’t have these nearby, consider how important that is to you when weighing up your move.'
Now is the time to think whether you can live without your local cafe/gym in the longer term, because you have the unique opportunity to assess how the absence of such amenities affects you personally.
3. If you're selling, take the time to organise everything
There really is no rush to sell your home as quickly as possible (unless you have to move asap, of course): contrary to all expectations, the housing market has proved resilient throughout the pandemic, and it's highly unlikely that there will be a sudden dearth of buyers when the stamp duty holiday ends. If anything, lockdown will spur on more people to move house, do you won't be left with no buyers. What you should do now is make sure your home is as presentable as can be for a sale – and that it's valued correctly.
If you think your home could benefit from a serious DIY project such as kitchen renovation or even extension, now is the time to do some thinking and planning. Or you could opt for more of a quick 'face lift': 'clear out all your clutter, fix anything that’s broken and give your home a fresh lick of neutral paint.'
Then, get your home valued, and only do this with a reputable agent with plenty of experience of selling homes in your area. As Brian emphasises, 'this bit is really important! If your home is overvalued, it could be on the market for a while. If it’s undervalued, you could sell below market value. You should have a few different estate agents value your house to get a good idea of how much your home is worth.'
Finally, if you're both selling and buying, now is the time to investigate the mortgage on your new home. 'Speak to a mortgage adviser who will talk you through your options. It’s a good idea to do this before you start viewing houses so you’ll know your budget. Also, dig out all the paperwork you’ll need when you apply for a mortgage too, such as payslips. It’s wise to choose your legal firm in advance as well. First time buyers will also need to provide a full audit trail of deposit cash.'