Stephen Kerrigan, a Fee Free Mortgage Advisor from Sheffield has warned that the coronavirus pandemic will exacerbate the longstanding inequalities which affect those thinking of buying their first home.
Mortgages Remortgages believes that even the recession caused by the crisis triggers a collapse in house prices, which means First-Time Buyers will find it harder to grab onto the Property Ladder. It is rumoured that house prices could fall by more than 20pc by Summer 2021. However, this sounds like it benefits young adults, but in fact the recession will reduce incomes and mortgages will increase tighter restrictions on mortgages.
The Stamp Duty Holiday was set up in early July 2020 in an attempt to re-energise the property market following the first fall in home values since 2012. This of course was resulted in a mini-boom in house prices in late July/August 2020.
There is a possibility that a house price crash could let banks start to retrench by cutting back on high loan-to-value mortgages, as First-Time Buyers could take out high loan-to-value mortgages more than 90pc of the property’s value.
Furthermore, the foundation drew attention to the fact that private renters have been taking a significant financial hit during the crisis.
While some households had managed to save money, only 13pc of private tenants aged 24-35 had savings of £10,000, and 25pc had had no choice but to dig into their nest eggs as the economic consequences of the pandemic ramped up.