This year is probably the worse year in many things, not only for how this affected relationships and business all over the planet, but also how it changed many points of view and things we took for granted.
Business-wise, more than 60% of businesses closed (according to Yelp via CNBC), meaning a total of 190 Million people are unemployed.
Some of the facts that lead to this were the fact that governments needed to reduce opening times or even close down on lockdowns. Many countries, like the UK, had a government backing up businesses with furloughs or even with money for granted, but countries like Portugal had an unbelievable 20% of help for the business. The majority of businesses are in a recession and 30% closed.
What about Real State?
The world divided into 2 categories, even more, visible this year of 2020. Those that lost their jobs or are in furloughs VS those that have money or companies that are buying and investing. This generated a Real State Monopoly and not in a good way. The plan would be to sell or rent houses at astronomical prices for people that don’t have anywhere to live in right now or need to move to a lesser home because they lost their jobs. This is a Monopoly of interests, and there is no Jail Free card.
UK vs US Real Estate Market
Europe (including the UK till now) prices show the difference of incomes for the different countries. While the rest of Europe shows a shift in real estate prices, with many houses for sale and lower prices, the UK has a 1.7% decline in sales making houses lower the price. We need to think that many companies left the UK because of Brexit and prices went up for goods.
Real estate prices in the US went up.
According to the Wall Street Journal, houses are now 4.3% higher in what could have been a 14 years forward price. They are ahead of time.
Because of the Pandemic, families are leaving the crowded cities to the suburbs or to a lesser habited cities/towns and with the lower mortgages rates being on the lowest ever (according to Freddie Mac), help on the sale of real estate.
But how to buy a house during the Covid in the UK?
Bank of England is looking at some options to ease the mortgage and help out families, individuals and give credit. Many First time buyers were left concerned with the rise and lack of jobs. Prime Minister said that Banks should continue to ask for a deposit of 5% to first-time buyers, to help on selling properties, and to help out first-time buyers.
But Britain’s biggest high street banks have stepped back from offering as many 95% and 90% mortgages, fearing that a house price crash triggered by Covid-19 could leave them with heavy losses. Lenders have also struggled to process applications for these loans, with large numbers of staff working from home. For many first time buyers and even for buying a bigger home, there is help online with good articles and calculators to check your affordability, one of the most checked is the https://www.sofi.com/home-affordability-calculator/. For financing or refinancing, you can confirm in real-time and not putting on hold your plans.
According to Bank Governor, the fact of something that would ease the mortgages would create an “overheating mortgage market is a very clear risk flag for financial stability.” Meaning that giving away too many easy mortgages would generate a lower return from customers and with the majority unemployed or on furlough, real estate could crash and generate a bigger recession that is. And because of this, 90% of loans have been stopped.
How to know that you can buy a house?
There are easy ways to find that out. 1st is the normal way of going to your bank and make the application.
But while the branches might be closed depending on the city Tier you’re in, you can always check on an online mortgage calculator. Fill in all the details and check.
Tip: Print the page and take it with your documents when you book a time with your branch manager from your bank.
Go online to your bank website and research the updated news or details in their new sections about Covid operations. It will contain all the details on how their mortgages are being issued and granted.
Book your appointment and take all the details and printed documents with you:
- The online mortgage calculator in PDF
- Your passport or other forms of ID
- Bank details
- House documents with the Square metres, address, and some photos of the facade
