As we’ve written in several articles the property market has been feeling the brunt of the Coronavirus & subsequent lockdown. There was a period where the market ground almost to a complete holt, at least the traditional open market anyways, but we’re over that and since have reported a spike in interest with Rightmove quite recently reporting some of their busiest days.
There’s an issue however, most buyers need a house repayments in order to purchase properties, which presents a little bit of a problem.
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house repayments companies for a while froze new house repayments applications, with the uncertainty on how the virus may have affected people’s ability to pay & having to grant house repayments holidays to those who where struggling to keep up with payments.
Despite positive news with a massive spike in traffic and viewings for the property industry, the sale are still going to be a struggle as the figures show that the house repayments approvals have completely tumbled in recent months. Back in February 2020, which feels like a long time ago, before all this started, house repayments approvals sat at around 73.67k in that month. Queue Coronavirus and the slow down began to become evident, in March figures of 56.13k where posted, followed by 15.85k in April.
Recently the figures for May got published, and it’s a bit of a concerning read, with house repayments approvals dropping as low as 9.3K, but what does this mean? Well, there’s not quite been the surge in house repayments approvals to match the ambition of house buyers, as lenders have little appetite to let funds go.
Although buyers seem motivated with viewing properties, it likely means that they aren’t easily going to be in a position to bid on them. house repayments companies have firmed up who they are granting house repayments too, and there rejecting a lot of people they previously wouldn’t have. This could mean it’s harder to sell your property.
Perhaps the more concerning thing is a lot of house repayments providers are still offering agreement in principles, meaning people are still bidding on properties only to find out later down the line that they can’t get a house repayments. This will mean that there is a large increase in chain breaks, and that buyers potentially spend money on solicitors only to be let down at the final hurdle. In fact, according to an article in the FT Advisor, half of buyers are denied a house repayments despite having an agreement in principle.
This challenging time presents issues for both buyers and sellers, nobody wants a property chain to fall through, it’s frustrating, time consuming and costly. It might be time to look for alternatives to the open market & secure that cash buyer!
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