It’s fascinating, depending on which news channel you put on, you’ll discover that COVID-19 is nearly beat, it’s worsening rapidly, or the second wave is about to hit. Of course, the exact situation does depend on where you live.
But, whatever the situation, the economic impact is real and tangible. Jobs are being lost and people are struggling to make ends meet. For many, the decision to sell their home during the Coronavirus pandemic is out of their hands. In short, they need to sell.
That doesn’t mean it’s a good idea.
In general, house prices are down. That means you’re going to get less for your home that it was worth at the beginning of the year.
If you have a large home loan and little equity this does risk you facing a negative equity issue. That could make it impossible or certainly undesirable to sell your home during the pandemic.
However, if negative equity isn’t an issue you may wish to consider selling as a means to take a step up the property ladder. Reduced prices mean that the home you choose to buy will also be at a lower price, making it more affordable. Add in low rate home loans and you could get your dream home, which wasn’t possible just a few months ago!
If you have the funds and can secure the loan, buying a property in this market is a great investment as the prices are virtually certain to rise once the pandemic has passed.
If you’re in this position then selling your current home makes sense, the reduction in price on your home will certainly be offset by the increase in the value of your new home. You simply have to commit to staying there for a few years.
Another reason to sell your home is to benefit from the low rate loans currently available. You may not be able to remortgage, but, selling and purchasing a different home could see you paying lower monthly rates. That could be a real benefit as the crisis rumbles on.
The pandemic has caused the economy to drop, although it is likely to recover it will take time. The government can’t afford to support businesses forever, meaning that unemployment is likely to rise.
If you have sufficient equity in your property it may seem like a sensible time to get off the property ladder and have some funds in the bank. You’ll need to rent a place to live and try to keep the funds for the future.
This may relieve some of the stress associated with the virus and economic uncertainty.
Selling can be a slow process at the best of times but it will definitely be slower during the Coronavirus pandemic. That doesn’t mean it’s impossible to sell your home but it will take time and you may have to drop your price more than you intended.
You’ll need to be prepared for this before you start the process.