What Does A Lockdown Extension Mean For The Medway Housing Market?

Hello readers. The past few days have been quite busy for me as I have been advising some new landlords on how to safely fill their properties as well as manage their portfolios during the COVID lockdown.

Perhaps unsurprisingly, yesterday’s announcement by the Government means that the period of lockdown will continue for ‘at least’ another three weeks. But what does this mean for property investors and what impact could it have on the Medway housing market?

Over the past few weeks, I have observed that mortgage companies have generally reduced their max LTV to 75% or lower. I have also had several conversations with investors who are not quite sure what their options are when either refinancing an existing property or purchasing properties at a pre-COVID price.

I read an article earlier this week which quoted a statistic from a Centre for Economics and Business Research (CEBR) press release dated 30th March that quoted a predicted 13% drop in house prices in the year to Q1 2021. It is interesting to think about this 13% drop however and consider our local property prices.

For example, the average property sale price in 2019 for Magpie Hall Road, Chatham was £155k and if this statistic rings true, by 2021 this price will £134,850. If you consider Gillingham High Street, the average selling price for a flat in 2019 was £172k and following the same logic, this could be £149,640 by 2021. This is quite dramatic, however if true could present an excellent opportunity to the seasoned investor.

In addition to this, the CBER predicts that by 2022 house prices will be 15% down from their peak and that the UK is about to enter the deepest recession since the financial crisis, including the steepest quarter-on-quarter decline in economic activity since comparable records began.

So that brings me to the question of what an extension to the lockdown means for the housing market. I think that simply put, it means that property investors need to more than ever be in for a long-haul and see the bigger picture.

What has now been made clear is that measures will not be lifted quickly in such a way that things will return to normal any time soon. I foresee that the sales market will remain effectively frozen and whilst the rental market will continue moving, it will be those who utilise things such as virtual viewings that will come out on top.

My advice is to exercise caution and be sure to plan extremely well. I would recommend that any risks you take should only be minimal and to err on the side of caution. If you are purchasing a property, be sure that you have the finance available should it be vacant for a slightly longer period or to pay a larger deposit to prevent you possibly slipping into negative equity.

I certainly recommend watching the market very closely over the coming weeks and months, being prepared to swoop in on any deals that come your way. As usual, I am happy to answer any questions that you may have and help where I can. You can get in touch with me by emailing hasan@home-share.co.uk.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s