In January 2020 the future looked bright regarding home equity. But because of the Coronavirus pandamic in April mortgage approvals slump to a record low, 86.61% – the highest percentage in history. But this isn’t yet reflecting on housing prices. We could see a 10% drop in prices because of the pandemic and sky diving mortgage approvals. So what will the future of home equity be? Is this a good time to sell property for profit? It might be an excellent time to buy if the market in days or months to come, doesn’t depreciate property value.
Understand that home equity is the market value of a property, excluding mortgage owed. For instance, if your home is valued at £1,000,000 but your mortgage is £500,000, the equity of your home is £500,000. If your home increases in value, then that can be added to the equity value. If it decreases in value, then you calculate the total value minus the mortgage owed.
Whatever the reason, whether we’re looking to buy-to-let or buy a home, might this be a good time to buy property? It might be a difficult time for mortgage lending, but if you are in a favourable position to buy, then now is a good time. We can’t rule out buying to let property either. Although we need to wait until we have a better idea of how the coronavirus pandemic has shaped the property market.
During these unprecedented times, it is almost impossible to predict things to come. What will the future hold? There is a likelihood that property prices will be dropping in the next 3 to 6 months. It is only a guess. So you might want to think about buying property now, if you are planning to rent it out for immediate cash flow on investment.
Buying now and spend a large amount on improvements might not be such a good idea. It all depends on how much you have, what the property costs and how much you need to spend on improvements or refurbishment.
If you are thinking of buying property please give us a call for a complimentary, no commitment chat. We have over 15 years of experience in the property market and can advise you on the best course to take. SG
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