Ray Boulger: Property transactions to fall lower than in 2009
Looking at the next three months, Ray Boulger senior mortgage technical manager at John Charcol believes property transactions will fall lower than in 2009.
In addition, Boulger suspects that house prices will fall this year by around 10% from the peak, which is likely to be March for the Nationwide House Price Index and April for the UK House Price Index.
Boulger said: “It is clear activity in the property market will be severely curtailed, not only because of the economic uncertainty dissuading people from moving but also as a result of practical problems of surveyors visiting homes to prepare a mortgage valuation.”
Boulger outlines that many people who had planned to move home this year will delay until conditions stabilise. Boulger cites property chains as being particularly difficult to put together in this climate.
As a result, Boulger highlights that this will put first-time buyers in pole position, which allows for them to negotiate their first home at a good price. However, he added that this is an advantage that will dissipate when the market starts to recover.
Furthermore, homeowners who delay moving and as a result need to change their existing mortgage should consider products without early-repayment charges, said Boulger.
He added that this would allow a borrower to retain maximum flexibility on the timing of their move.
Boulger said: “Most mortgages with no early repayment charges (ERCs) are trackers or discounts but a few lenders offer fixed rates with no ERCs.
“Although most mortgages with no ERCs are “portable” borrowers must meet their lender’s criteria at the time of moving, even if they are reducing their mortgage, and so it is much safer to have a mortgage with no ERCs.”