A return to normality (if there ever was such a thing) – well, not quite, but we are getting there… slowly. Social distancing will stay in place for some time and will have an adverse effect on the property market. The inability of valuers to visit property has either slowed some deals or killed them off altogether. Lenders were quick to introduce desktop valuations and this did keep the wheels turning to some degree, but it couldn’t be used for some of the more complex, higher risk loans. Some lenders chose to withdraw from the market temporarily and others took a cautious approach and raised the loan to values.
With the lockdown easing, some of these lenders have returned to market and business is being done. Confidence in the sector remains relatively healthy; valuers, construction workers and furloughed staff are returning to work. As long as we can all observe the correct social distancing rules hopefully this will continue.
Catching up with the backlog of pipeline cases is going to take some time so we all need to be patient. One lender we spoke to recently has quoted a minimum turnaround of 12 weeks and I’m sure they’re not alone.
On the plus side, those who dropped maximum loans to 60 or 65% are re-introducing loans back to 75% and clean cases are being met with low corporate buy-to-let rates below 2%.
If I had a quid for every time someone asked me what was going to happen to property prices, I’d be a millionaire. Well, OK, not quite that rich, but I’d certainly be better off! If anyone has the definitive answer, drop me a line. Jokes aside, I heard from one major valuation company (and I’m not saying who) that they are factoring in a 1–2% down value at least for the time-being.
If you are a landlord finding it tough, there are a number of measures being put in place to help you, including amendments to facilities and capital payment holidays. If you haven’t done so already – and you need help – contact your lender to discuss your concerns meeting loan repayments.
Good luck, and keep smiling.
