What does 2020 hold for the housing market? Will mortgage rates remain low in 2020 and will affordable homes remain scarce? Some things will continue from 2019 but there are likely to be some changes. We’ve compiled some key housing and mortgage trends to watch for in 2020.
1. Mortgage rates will likely remain low
Despite political and economic uncertainty, mortgage borrowers had a good year in 2019. In the last half of 2019, mortgage rates averaged about 2.5% APR and there is not likely to be much change going into 2020. Competition in the market has been strong which helped drive down rates. First-time buyers and even those with small deposits will continue to find a good choice of lenders and deals. That said, the recent announcement that Help to Buy is coming to an end will have a big impact on first-time buyers
2. The end of the Help to Buy scheme
At the end of 2019, it was announced that the Help to Buy scheme is being phased out by the government during 2020 and 2021 and completely ending by 2023. This will limit the choice of mortgages for first-time buyers and restrict some from entering the market altogether.
3. Uncertainty will continue
With Brexit negotiations continuing in early 2020, much depends on how Britain leaves the EU and what deal is struck by Boris Johnson. Whatever happens, there is likely to be the return of political and economic uncertainty which will have an obvious impact on housing prices.
4. A shortage of property
Homebuyers have faced a shortage of homes for sale for several years, and the low stock is expected to continue throughout 2020 and beyond. Entry-level homes, in particular, are in short supply with not enough homes being built to accommodate young adults wanting to leave the parent’s nest.
5. Sellers could obtain multiple offers
With low inventory as well as low mortgage rates, bidding wars become more common as affordability brings out more buyers.
6. Homeowners will stay, not sell
Homeowners aren’t as restless as they used to be and are staying put for longer periods of time and this will continue throughout 2020. This is partly due to political and economic instability but also a shift in how people live their lives. It used to be more common for people to move every six years or so as they outgrow a house but this is becoming less the norm and people are instead opting to renovate and extend more often in order to stay in the same property.
2020 could be a bumpy year for the housing market overall, with a great deal of uncertainty looming, but with some careful planning and some good mortgage advice, you can still make it work for you and your property buying journey. Click here to get free and instant mortgage advice from Propillo.