UK Property Market Outlook — 2020

Photo by Tierra Mallorca on Unsplash

Similarities with the Global Financial Crisis

My previous article looked at how the UK property market was impacted by the Global Financial Crisis (GFC). The circumstances leading to the GFC were very different to the COVID-19 pandemic. Sub-prime mortgage transactions was a major contributing factor to the GFC property decline, by 15% in Q4 2008!

Current property market landscape

Banks removed their high LTV / riskiest mortgage products from the shelves (i.e. 85% — 95% LTV mortgages) as they are worried that house prices will fall, and homeowners will fall into negative equity. Currently, only a few banks provide the highest LTV mortgage product at 90% LTV.

My view on the property market

My points of advice

Trust your instincts: If you are trying to buy a property now, take the words of estate agents with a ‘pinch of salt’, especially those that tell you there won’t be a market downturn. Remember they earn money by selling the property. Instead, use the online property tools (e.g. Rightmove, Zoopla) and track how much houses were sold for in your area of interest, in recent times — to drive negotiations.

  • Can I negotiate prices below market value?
  • Should I get a 2-year fixed rate or a longer fixed-rate term to weather the storm coming?
  • Location: Are there shops, schools, and accessible transport links that can help stabilise the property value?

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Ade Akindele

Ade Akindele

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My purpose here is to provide you with a different perspective on everything going on in the world. Hit the follow button, I promise you won’t regret it.