Any housing market experts about?

  • Hi, just interested in sounding out a few questions with anyone in the know regarding looking to move over next year or so and Covid's probable impact. Basically fast outgrowing current house but we love the location (Dorset). The next tier houses are currently a big jump up in budget though. The budget largely relies on my FI port too (gulp!).

    • Keep garage or convert it to living space? Or just spend the money on moving? Guessing cost of extension wont really be affected by Covid, but wondering if an opportunity for better value in moving may be thrown up by a reaction to the recession coming?

    • Will stamp duty likely be lowered as part of any reaction to Covid?

    • Will mortgages stay low/go lower or go up in any reaction to Covid?

    I know I'm asking mystic meg type questions, but a general sense would be good. If anyone has heard any plans for stamp duty or mortgage rates, send the whispers my way.

  • @Westy I had the same conundrum last year (Wiltshire for me so similar demographic).

    We decided to go up and out and added large kitchen and additional room for a fraction of what it would have cost to move to something similar.

    At the time interest rates weren’t a massive concern; but ore Covid you might get a good price from tradesmen eggar to make up for the money they lost on the government scheme (well they shouldn’t have fiddle the tax returns last year I guess).

  • @Sav2000 ah yes good point, maybe lots of keen builders wanting work

  • Hi Westy,

    I'm a CeMAP qualified Mortgage and Protection Adviser.

    I'll just answer your bullet points as a quick fire for now.

    Converting won't be affected. Probably the best option. If you move you'll also have Stamp Duty as well as taking on a bigger mortgage and/or putting bigger deposit down.

    Stamp Duty won't change. There were talks of helping those who need to downsize due to Covid. Nothing solid yet though.

    Mortgages will remain low, for quite sometime. Rates rising isn't the biggest threat to the industry, it's currently the lack of products.

    95% mortgages are now impossible. When I last looked you had 5 lenders taking on 10% deposits. I feel the deposits required may get bigger when purchasing.

    I'm in the UK, we can't afford for rates to rise. It would cause a whole host of problems. But at the same time lenders can't keep affording to give away payment holidays AND low interest rates. So something has to give and I believe it's the requirement to have a bigger deposit.

    Regarding property prices, all relative. If you sell in a housing crash, you'll be buying at the same time.

    Hope this helps.

  • Hi Westy,

    Without hindsight it is impossible to correctly predict but what can confidently be said is that mortgage rates will never possibly be lower than they are now.

    It is difficult to predict what measures the chancellor will take in forthcoming budgets to try to boost all sectors of the economy. Stamp duty may well be tinkered with at the lower end of the market but probably not at 500k plus as that would seem like to much of a helping hand for the wealthy.

    Personally I prefer to think of a main residence as a home 1st investment secondly as with the costs involved now you can’t get it wrong and as moving a 2nd time would cost far too much.

    Therefore if you see a property you can see yourself in for many years to come and would be happy in then locking into a long term fix 5 years or even longer that is affordable is a low risk high upside choice as there is little chance you will not see a good rise in price in the future.

    In addition if you are moving up you should hopefully pay less for the property currently than pre COVID so even though you get less for yours you will be better off.

    We have a mortgage arm attached to the investment business that completes upwards of 100 mortgages a month and in roughly 95% of ones agreed before COVID the vendors have gone back and negotiated lower prices.

    Converting is always good but I find most clients still end up moving up the ladder a few years after. My guess is that prices in Dorset will be lower now than 12 months ago but in another 12 months may well be back to pre COVID prices so could be a window of opportunity.

  • Great info, cheers @Sicario and @Fletch

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