With the recent freeze on the UK housing market, many buyers are stuck wondering where to go. People who were in the middle of moves are finding that no one wants to complete the deals and leave home with a panic raging. Many find themselves stuck without anywhere to go with their old home sold and the sellers of their new home refusing to leave.
Market Frozen
Lenders and other financial institutions begged for the government to shut down the market after they claimed that it was impossible for them to do business. The government initially urged people to put off moves and finally put out stronger orders to stay put until it becomes clear how the crisis will play out. With mortgages drying up and viewings canceled, the housing market is now on ice. Estate agents and others in the industry are looking at a tough few months. Online only offerings through estate agent software only do so much, particularly with urgent need.
Contracts Pulled
With the official recommendation to put off moves for the new future, many buyers are pulling out of sales and sellers are staying in their homes if they can. This leaves anyone who was in the middle of a move stuck, frequently with nowhere to go. Some are turning to the rental market while they wait for the market to settle, but it’s uncertain how long this will remain an option, given that moves are discouraged. Property lawyers are scrambling to work out what to do about half-completed contracts in the face of government recommendations and a now frozen market.
Moves Stopped
With so many floundering, the rental market is likely to see a demand from a group it rarely sees represented. People who own homes and are financially stable enough to purchase a home suddenly find themselves looking for a place to live after their old home is supposed to be vacated but their new one isn’t available. This may drive up rental demand in the short term. Estate agents are scrambling for solutions, estate agent software can’t always handle the demands.
Government Pushed The Current Situation
For years, the government has pushed homeownership. The Conservatives have long held homeownership as an important part of their platform, all the way back to Margaret Thatcher. This has pushed up the demand, but little has been done to address supply. This means that one good disruption like the current crisis can leave buyers scrambling to find housing.
Financial Institutions Had Already Pulled Back
The situation is only compounded by the actions of financial institutions. Between refusing to pass on breaks in interest rates from the Bank of England, pulling tracker products or even increasing their margins. Now with many mortgages limited and the standard measures for mortgages disrupted, buyers are stuck. Those who were planning a move but hadn’t applied for mortgages yet are in a bond, particularly anyone who was looking to purchase their first home and get out of leased property. Hopefully, the pause will be brief and things can get back to normal soon. However, the current situation reveals much the government needs to do to protect buyers now and in the future.