What does Coronavirus mean for first time buyers?

What does Coronavirus mean for first time buyers?

If you were planning on buying your first home this year, you may be feeling confused and concerned about whether your plans can still go ahead in the midst of the COVID-19 pandemic and lockdown.

After almost two months on hold, the government lifted restrictions on the property market on the 13th May 2020, with estate agents being allowed to reopen and buyers allowed to view properties again.

This means the property market is back up and running, but where do first-time buyers stand? We’ve answered your questions about how first-time buyers could be affected by coronavirus.


Can I still buy my first property?

You can. While the property market has slowed down over the past couple of months, house sales have still been going ahead. The government’s announcement in May has made it easier to view properties again, though you are encouraged to house hunt virtually as much as possible, until you find a property you are seriously considering making an offer on.

If you’re looking to buy a brand new property, the process will be easier throughout, from the viewing stage through to completion. This is because new properties are unoccupied, and fewer stakeholders means a lesser chance of someone in the process having to stall because of experiencing COVID symptoms.


Is now a good time to buy?

It’s too early to tell exactly what the impact of coronavirus will be on property prices. Forecasters are making different predictions about how much house prices may fall – if at all – and so it could be worth holding out to see what happens in the coming weeks and months.

During lockdown, you may have found yourself with plenty of time to think about where you want to live, and where you want to buy now may be different to before. Take your time to ensure you buy in the right place.


What is the impact of coronavirus on first-time buyer mortgages?

There has been a decrease in the number of mortgages available over the past couple of months, especially lower deposit mortgages (those that only require a 5-10% deposit). This means that a good deal may be harder to come by, but rest assured that there are still some on offer.

If you have a higher deposit to put down, you may find it easier to find a good mortgage deal.


Have asking prices dropped for first-time buyers?

Prices of typical first-time buyer homes have generally remained static across the country. [1] As we’ve mentioned, the future of the property market is still uncertain so we could see asking prices drop in the coming weeks and months.


Can I still use Help to Buy?

The government has stated that it will continue to honour Help to Buy: Equity Loans agreed with home buyers before the lockdown.

Many mortgage lenders have committed to keeping existing mortgage offers open for three months - if your main mortgage lender has agreed to this, your Authority to Proceed will be extended up to the expiry date of your existing mortgage offer in line with current guidelines.

If your Authority to Proceed has expired, get in touch with your Help to Buy agent urgently and ask for an extension. This will allow your home purchase to continue. Make sure you check that your mortgage offer will remain valid if a new completion date is agreed. [2]


What other help is there available for first time buyers?

Shared-ownership homes

Shared-ownership homes in new developments are still for sale and require a lower deposit, making it easier for first-time buyers to get on the property ladder. Under this scheme, you purchase a share of the property and pay rent on the rest.


Stamp duty holidays and legal fee discounts

Some developers are offering stamp duty holidays and deals to pay your legal fees when you register for a new home online. [1]


How to make an offer on a house during Coronavirus

Government guidance states that you are free to make an offer or reserve a property as normal.

For more information for first-time buyers, explore our guide to new build property and read our five do’s and don’ts when finding your first home.


[1] https://www.homesandproperty.co.uk/property-news/buying/first-time-buyers/buying-home-coronavirus-mortgage-deposits-a138451.html

[2] https://www.gov.uk/government/news/information-for-help-to-buy-equity-loan-customers-during-coronavirus-covid-19