Covid-19 – words one has dreaded to hear over the last year or so! However, with all the lifestyle changes it has caused, the pandemic has had some “ups” as well, considering the property market. Real estate agents, like the Kings Cross estate agents, can bring to light some of the ways the pandemic has affected property deals.
Mortgages: Approvalshave not been so easy since the pandemic, but they are still attainable with reasonable rates. This is especially so with more extensive deposits.
- Mortgage payment holiday: Due to financial difficulties with job loss, furlough and other reasons caused by Covid-19, for buyers who are not able to repay their mortgage commitments in time, the Government has allowed some relief by mortgage payment holidays. Homeowners are entitled to a full payment holiday of up to six months. If a deferral is already in place, you can extend it to the six month limit. If you have started repayments after a deferral, you can apply for a further payment holiday to the limit of six months. This will not apply if you have already deferred payments for six months. The request for borrowers for a payment holiday will end on 31 March 2021. After this date, deferrals can be extended up to 31 July 2021 but should not exceed the limit of six months. Deferrals during the payment holiday will not be reported as non-payments. However, interest will continue to accrue during this time so that the long-term perspective can be more expensive for the borrower. The FCA has confirmed that lenders should not charge extra fees to arrange a payment holiday. They have also extended the ban on repossessions till 31 January 2021.
You do not have to test positive for Covid to apply for this payment holiday. However, you should request your lender for this holiday, in writing, and not just stop repayments. They will then be listed as missed payments, and your credit rating could go down.
- Alternatives: There are some other options as well, which may be available:
- Change the payments to interest-only for a certain period, which will lower the monthly payment.
- Extend the mortgage term, reducing the monthly payment
- Add the deferred payments to the overall balance amount and spread it over the mortgage period.
However, clarify with your estate agent about interest payments and whether the short-term benefit will end in an overall saving.
Stamp duty land tax holiday: With the land duty tax exempted for properties up to GBP 500,000 (valid till 31 March 2021), many investors are taking advantage of this, causing a rise in property deals. The higher the price, the more benefit to the buyer. This is especially relevant to the more expensive properties in the city areas, including properties for sale in Kings Cross. Rentals will also be higher in these areas.
Demand: With more people working online and from home, a majority is now searching for homes away from the city centres with more extensive accommodation and more space available, for gardens and relaxation. The rental demand for more comfortable accommodation is still high for those who cannot afford to buy such homes. For advice and guidance, letting agents in Kings Cross can be reached at any time.
Virtual viewings: With the lockdowns, and the Tier state of the location, some physical viewing of properties had to be stopped. However, with digital virtual viewing, a survey of the property could be taken, which has helped a great deal during the pandemic. Estate agents, especially the more renowned ones like Berkshire Hathaway HomeServices Kay & Co estate agents in London, can provide detailed virtual viewings which are almost like being physically present. They can also arrange surveyors to assess the properties. Physical surveyals are not permitted; they submit desktop evaluations considering several data, including the historical value of properties, the local conditions and the expected market state.
Opportunities for repairs and maintenance: Some buyers have been able to take advantage of the lull caused by the pandemic to attend to repairs and other minor improvements to renovate and increase the value of their properties.
Covid vaccine: The approval of the Covid vaccine will affect the economy in general. Although it may take some time, social distancing will be relaxed, and progress in the construction area can resume. Buildings that could not be completed during the pandemic will be constructed with efforts to make up for the delay. Hence there should be a boom in the construction sector, significantly since the demand exceeds supply.
Conclusion: The pandemic has caused significant upheaval worldwide, and it is difficult to predict the future, including for real estate. However, with the “bricks and mortar” having battled the challenges of Covid-19 and its effects, there is hope for the future as well. Of course, all the essentials – budget, taxes, fees, probable outcome, legal matters – will have to be considered. This is where the expert advice of your professional real estate agent is invaluable.