Mortgage lenders are slowly reopening their doors to new applications and estate agents report that buyer interest has surged following the relaxation of lockdown rules two weeks ago.
Property listing site Rightmove said it had its ‘busiest ever day’ on Wednesday, surpassing six million visits for the first time and up 18 per cent on the same day in May last year.
According to the site, the number of sales being agreed by agents is slowly starting to pick up but they warn it will take time for things to recover meaningfully. And other property industry insiders say that, while the recent flurry of activity is promising, the housing market is struggling to emerge from its period of stasis.
Why? Because nobody knows how to value homes accurately in the aftermath of the coronavirus pandemic and social lockdown.
Estate agents report that buyer interest has surged following the relaxation of lockdown rules
How coronavirus affected the housing market
Homeowners were told by Government not to move house and surveyors were unable to conduct physical property inspections and valuations due to the social lockdown guidance imposed on 23 March.
It triggered an almost complete closure of the property market overnight. Even where moves could be delayed, sales stalled or collapsed as lenders wereunable to assess risk for new mortgage applications.
Particularly for more expensive homes, new build and specialist buy-to-let properties, the majority of lenders refused to accept automated valuations made using a combination of housing market data and checked by a local surveyor.
Is the housing market now open for business?
On 12 May Government confirmed that surveyors and estate agents could go back to work and homeowners could move house again so long as strict social distancing measures are followed.
HSBC began confirming valuation bookings within hours of the Government safety guidance on how to conduct physical property inspections emerging.
Nationwide told mortgage brokers a day later that it planned to contact applicants to arrange their mortgage valuation by 29 May and hoped to have cleared its backlog by 12 June.
Skipton Building Society, Halifax and Santander began to rebook valuations on paused applications the same week, and major valuations firms L&G Surveying Services and Connells Survey & Valuation also confirmed plans to restart physical valuations imminently.
Consequently, over the past fortnight many lenders have relaxed criteria on their mortgage deals with several reinstating loans to those with a 10 per cent deposit or equity, which were shelved when the crisis hit.
Virgin Money, Clydesdale Bank and the Co-operative Bank have all raised their maximum loan-to-values to 90 per cent and Coventry Building Society confirmed it will recommence offering mortgages for those with a 15 per cent deposit or equity to put in.