As yet, we simply don’t know the full effect of lockdown on the UK economy and how that will translate into employment figures, buyer sentiment or whether lenders will tighten their criteria to protect themselves.
It’s eminently possible that we may be in for a short pause: a few modelling exercises have predicted a short, sharp, shock to the economy for a few months after lockdown, with a recovery in the final quarter of 2020.
Much is made of negative press commentary and, while gloomy headlines can affect the market, sentiment among buyers is also driven by the behaviour of lenders: if mortgages are readily available and not overly restrictive around deposits or other security, that may be enough to sustain a sufficient level of enthusiasm among buyers. It’s in the genes of Britons to own a home!
However, uncertainty could see a slight dip in prices. Just as property owners can take advantage of a seller’s market, buyers understandably do the same when conditions are different. The prospect of a short-term dip could also be seen as an opportunity among first-time-buyers to get on the property ladder.
A few months isn’t enough for a large drop, and you may find a single-digit dip can be absorbed by the equity in your existing property, or recouped on your purchase. If you are buying a property that is more expensive than your current home, a short-term dip could work in your favour as the gap decreases between your selling price and buying price.