What effect will coronavirus have long-term?
The effect coronavirus will have long-term is a question many are yet to ask due to the bombardment of daily updates.
Housing expert Henry Pyror believes that “life will never be the same again’.
He added: “Historians will talk about BC and AC – before and after Corona.”
Pyror suspects that hundreds of thousands, possibly millions of people look likely to loose their jobs and will struggle with mortgage payments or rent.
What impact missed repayments will have on credit profiles and individuals long-term ability to borrow is still unclear, Pyror highlights.
Furthermore, Pyror believes that house prices may take a dive, and he outlines that it will be Christmas at the earliest before buyer confidence returns, assuming that this is all under control by July.
Pyror said: “Make no mistake, like much of the rest of what we took for granted a month ago the property market in general and the mortgage market in particular is going to look very different in a months time and like the rest of the economy it may take a decade or more to recover.”
Mike Brown, director of Crystal Clear Financial Services, believes that on a long-term basis, he suspects mortgage lenders will develop a policy of understanding around affordability for this financial year.
Breaking it down, Brown said that he believes lenders will be forgiving if a client can demonstrate a before and after stability of income, then therefore “ignore the COVID-19 year”.
As a result, Brown outlines this as essential in getting recovery in the market and also confidence for the consumer.
Rob Gill managing director and co-founder of Altura Mortgage Finance, believes that with the base rate now scraping just above zero, this is the beginning of “what promises to be a prolonged economic downturn”.
Gill also highlights the “real possibility that rates will have to go negative.”
He said that with negative mortgage rates already noted in Scandinavia, Gill believes that “UK lenders will need to start planning for that possibility here on everything from systems through to their underlying business models”.