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House prices are predicted to drop for the first time since September as a consequence of COVID-19, according to Nationwide. The lender is expected to say this week that house prices fell by 1% this month, compared to a 0.7% increase in April. Economists add that annual house price growth for April, as measured by the Nationwide House Price Index, is likely to come in at 2.8%. House prices had been surging before the coronavirus lockdown, which effectively shut down the market by stopping people going to viewings.
Sunday Express (24/05/2020)
The government has confirmed that homeowners who are still unable to pay their mortgage because of the COVID-19 crisis will now be eligible for a further three month repayment holiday. An initial three month mortgage holiday scheme was set up in March and ministers have now decided to extend it. The deadline for applying for an initial repayment break is also being extended to October 31. However, where people can afford to restart payments they are being encouraged to do so, even if it is not for the full normal monthly amount. “We’re doing everything we can to help people with their finances at this difficult time, and that includes making sure people get the support they need with their mortgages,” commented John Glen, the Economic Secretary to the Treasury. Meanwhile, experts warn that those who opt for the full six-month break could pay £948 in extra interest over the term of their loan.
Daily Mail (22/05/2020) The Guardian, (22/05/2020) The Times (22/05/2020)
Graeme Craig, director of commercial development at Transport for London, talks about how TfL is "passionately committed" to homes development. TfL has a long-term development pipeline to deliver 10,000 homes, of which around half will be affordable. There are also some 3,000 homes set to be created for the rental market. Mr Craig said: “The COVID-19 crisis has had a profound effect on construction… We are working to understand [its] impact on the planning system and how boroughs can continue to ensure there is public scrutiny of new development schemes, and will be working with the Mayor, developers and councils to make sure that we can build the homes our city needs in a safe, responsible and transparent way.”
Evening Standard (16/05/2020)
Data from the Office for National Statistics reveal that the average UK house price increased 2.1% in the year to March, an increase from 2% in February, to an average of £232,000, while London house prices were up 4.7%. At a regional level, average house prices in England rose 2.2% to £248,000 in the year to March, while Wales saw a 1.1% increase to £162,000, Scotland saw prices rise 1.5% to £152,000 and Northern Ireland showed a 3.8% increase to £141,000. Yorkshire and the Humber was the worst performing region, with prices down 1%. Lucy Pendleton, property expert at James Pendleton, commented: “Enquiry levels are off the chart at the moment and we are gradually bringing back more staff… Only time will tell how we can convert those enquiries and how that translates into all-important prices for vendors.”
City AM (20/05/2020) The Times (20/05/2020) The I (20/05/2020) Daily Mail (20/05/2020)
First-time buyers may face challenges as they look to enter the reopened property market, with banks offering fewer mortgages for those with smaller deposits amid fears house prices could collapse. Analysts from Deutsche Bank have warned that house prices could fall by more than a fifth, while Lloyds Bank has predicted that prices could fall 30% in the next three years in a worst case scenario. A report issued by Moneyfacts shows that just 30 different mortgages are available to borrowers with a 5% deposit, down from 393 before the pandemic closed the property market.
The Daily Telegraph (19/05/2020)
The mortgage breaks taken by 1.6m homeowners due to the COVID-19 pandemic could cost them at least £821m in extra interest. Figures calculated by the broker L&C Mortgages, based on data from UK Finance, show that a borrower on the typical deal will save £2,256 in repayments by taking a three-month mortgage payment holiday. However, they will ultimately pay £500 more than they would have done without the break because of the interest accrued on the unpaid sum. Meanwhile, the Telegraph reports that homeowners who want to take up their lender's offer of a "mortgage holiday" during the pandemic are still being asked to pay because banks are struggling to approve the payment holidays quickly enough. And those who miss a mortgage payment because a break has not yet been confirmed could be marked as going into arrears. This could affect their credit score and result in extra interest being charged.
The Times (15/05.2020) The Daily Telegraph (15/05.2020)