Lendning on UK property market CLOSED! Or is it?
Talked to one of the most experienced mortgage brokers in the UK Midlands the other day.
Richard Ignatowicz told us that the lockdown due to Covid-19 has affected the loan market in many ways. It´s harder to get a loan nowadays.
There are fewer lenders to approach – in Scotland there is none who agree to a loan for the moment.
One reason to this is because no viewings are allowed - the inspectors have to do a “desktop evaluation” of the value of the property, which then is used as an estimated value and that is the base of the calculations for the loan.
Since the mortgage calculation is a best guess desktop product, the size of the mortgage is lower (normally 60-70 % LTV) and the interest is higher (normally 7,5-9 %).
Does this mean that the market is all dead and it´s better not to invest in the UK?
Oh no, even if the market is on hold, Richard shared a few tips for us property investors to take advantage of the situation:
• Follow the market, keep an eye how it develops
• There will be properties for sale, at low prices – when a good deal appears, go for it
• Most probably there will be a price drop of about 5-10 % post Covid-19, but the overall is that the property market will increase the coming years.
(This is backed up by Savills, a big property company, who predict an increase of about 15 % until 2024).
Keep calm, do your research, build your portfolio, be ready to act when the opportunity comes!
How does this affect your strategies?
What are your plans and strategies to move on and come out stronger post Covid-19?
