lobally have pledged huge sums of money - known as fiscal stimulusto support their economies/www.telegraph.co.uk/money/fisher-investments-uk/coronavirus-fiscal-stimulus-benefits-limits/?WT.mc_id=tmgspk_plrnlr_2866_AvKzR2PXhb97&utm_source=tmgspk&utm_medium=plrnlr&utm_content=2866&utm_campaign=tmgspk_plrnlr_2866_AvKzR2PXhb97&plr=1&mvpf=88cac5ad91614fea88712d7337420803&mvpflabel=lobally have pledged huge sums of money - known as fiscal stimulusto support their economies/www.telegraph.co.uk/money/fisher-investments-uk/coronavirus-fiscal-stimulus-benefits-limits/?WT.mc_id=tmgspk_plrnlr_2866_AvKzR2PXhb97&utm_source=tmgspk&utm_medium=plrnlr&utm_content=2866&utm_campaign=tmgspk_plrnlr_2866_AvKzR2PXhb97&plr=1&mvpf=88cac5ad91614fea88712d7337420803&mvpflabel=

What the property market could look like when lockdown lifts
Plus: why higher earners are struggling to pay the bills

View in browser

Update your preferences

The Telegraph

Wednesday April 29 2020

Telegraph Money

 

The week's most important personal finance news, analysis and expert advice, from pensions and property to investment ideas and savings tips.

The property market will suffer long after lockdown

By Marianna Hunt,
Personal finance reporter

People trying to buy or sell a home are anxious for lockdown to lift, but when it does they may find they are re-entering a very different property market.

Self-employed people are already raising concerns they won't be eligible for a mortgage when the pandemic is over and first-timers poised to buy could well find banks are no longer willing to lend to them.

Since mid-March the number of agreed house sales has plunged by 92pc. Property portal Zoopla expects the number of transactions from now until June to be around half the amount there were in the same period of 2008, during the financial crisis.

Back then property values fell 20pc in just 16 months. So does this sharp drop in transactions mean house prices will drop by twice as much as after the financial crash?

Not necessarily. The factors at play are different now. In 2008 people were borrowing more than they could pay back – since then banks have introduced stricter checks when approving mortgages to avoid this happening again.

A more accurate bellwether is the current economic climate. Already two million people have lost their jobs and more could follow, which will hamper people's ability to buy a home and could drag down prices. Those most at risk of falling into negative equity are buyers who have a large proportion of their house value mortgaged.

So how can you protect yourself? The most important thing to remember is that negative equity does not mean you have to immediately sell your house at a loss. Often the best option is to sit and wait until prices recover and you should be fine.

You could also try asking your lender for permission to rent out the property instead of selling it. This income could go some way to covering your mortgage.

Remember that any decisions you make now will have a huge impact on your finances in the future. Around one in seven households have taken up the offer of a holiday from their mortgage payments. However "holiday" doesn't mean it is going to be an easy ride: that money will still have to be paid back and interest will be charged during that time so you will end up paying more.

Are you enjoying the Money newsletter? We would love to hear your thoughts in our short survey. Click here to help us improve your experience.

And now, the good news: you, our dear and generous readers, have raised more than 1m for our coronavirus charity appeal. It's not too late to donate – visit telegraph.co.uk/appeal or call 0151 284 1927 (Mon-Fri, 9am-5pm).

You can always find more news and advice at Telegraph Money. Subscribe now and try your first week for free.

 
 

Top stories

Someone with their head in their hands

2,500 monthly cap: higher earners placed on furlough are now struggling to pay bills

Houses in a bath tub

Landlords and tenants struggle to stay afloat during coronavirus

Rishi Sunak

Inheritance tax was raised to 80pc after WWII – could it happen again now?

Money Makeover

Lloyd Cardoza

‘Our pensions have plunged 25pc since coronavirus. Can we still retire early?’
Read more

 

Are you enjoying this newsletter?
Let us know how we're doing.

 
 

Your money

 
 

Advertisement

Liveintent MPU
Powered By Liveintent Liveintent Adchoices
 

Best of the rest

A bank office

Questor
Lloyds and Barclays have both lost 50pc. This is why Barclays is the one to buy

Dylan Hartley

Fame and Fortune
Dylan Hartley: ‘I made money selling my England under-19 training kit on eBay’
Click here to read

A person standing outside HSBC

Katie Morley investigates
‘HSBC’s typo cost me 10k and now it’s ignoring my complaint’
Here's what happened

 

Sponsored

Fighting coronavirus: the benefits and limitations of fiscal stimulus

 

Try your first week for free - and see just how much you can make of our journalism

 
 

Here's what our readers said

 


In our comments section, M EH said of Inheritance tax was raised to 80pc after WWII – could it happen again after coronavirus?: "Money can and should be saved elsewhere, for example, by leveling up public sector pensions with private sector schemes, so we all get to retire at similar ages and with similar benefits. Death taxes are a sure-fire way to isolate many votes and are hugely controversial as they penalise people twice given that the assets have already been paid for out of previously taxed income in most cases. Chancellor Rishi Sunak has already made a mess with his bail-out package, failing to help thousands of people: don't let him mess around with inheritance tax."

Join the conversation here

 

We hope you enjoyed our newsletter. If you have questions or feedback, please visit our help page. If you have questions about your Telegraph subscription, including delivery issues or technical ones, please visit this page and contact us that way.

 

See more Telegraph newsletters

 

Investor  |  Property  |  Business  |  Front Bench  | 

 

We have sent you this email because you have either asked us to or because we think it will interest you.

 

To unsubscribe from this newsletter, visit your account here and update your preferences.

 

For any other questions, please visit our help page here.

 

Any offers included in this email come with their own Terms and Conditions, which you can see by clicking on the offer link. We may withdraw offers without notice.

 

Telegraph Media Group Limited or its group companies - 111 Buckingham Palace Road, London SW1W 0DT. Registered in England under No 451593.