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Landlords ‘preparing for bargain house prices’ after coronavirus

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  • 23/04/2020
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Landlords ‘preparing for bargain house prices’ after coronavirus
Landlords are gearing up to release equity so they are in a position to pick up properties at reduced prices when the coronavirus crisis has blown over, according to some advisers.

 

The purchase market has all but ground to a halt since the government put the country on lockdown and advised buyers and sellers to postpone moves where possible.

And it appears many landlords are expecting property values to take a hit when the restrictions are eased.

James Chisnall, director at City Finance Brokers, told Mortgage Solutions that buy-to-let clients were helping to keep him busy at the moment by putting in remortgage applications to raise cash.

He said: “Lots of professional landlords want to release as much equity as possible, they think they are going to get property at knockdown prices.”

 

House price bargains after coronavirus?

It remains to be seen whether house prices will indeed fall after the Covid-19 crisis has eased.

Some agencies have predicted a small short-term fall, but it will very much depend on how long restrictions last and the shape of the economy coming out of it.

Howard Reuben, principal at HD Consultants, said the larger and more professional landlords will treat the current crisis as ‘business as usual’, by looking for opportunities during the crisis, while carrying out due diligence on any purchases.

However, he does not anticipate a lot of ‘bargains’ to be had.

He added: “Property values aren’t going to collapse with certain commentators only predicting a three per cent dip and when the restrictions are lifted for lenders and valuers, there may indeed be a lot of buyers coming out of the woodwork, but that will in turn drive it to be a sellers’ market again.

“There are always opportunities for the professional and savvy investor, and seller, but it is all relative and I don’t see any major shift from any particular angle.

“And I have witnessed this market from a perspective of being a mortgage broker for 27 years and also a portfolio landlord for 20 years.”

 

Wait and see

Certainly not all landlords are feeling bullish.

Jane King, mortgage and equity release adviser at Ash-Ridge, told Mortgage Solutions her clients in London and the South East were more worried about the current climate.

She said: “Landlords are very nervous about their ability to collect rents and, like many of us, are more interested in keeping afloat during the current pandemic.

“With no physical valuations or conveyancing being completed, it will be very difficult to carry out any sort of capital raising right now anyway so my landlords are taking a ‘wait and see’ approach and will make decisions once our exit strategy is more clear and the markets can start moving again.”

 

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