Mortgages Tips

‘Will the property market recover this year?’: families fear mortgage hopes may be over


The housing dreams of millions of people may have been dashed by coronavirus because many self-employed workers fear that they could struggle to get a mortgage in future.

These workers, many of whom have seen their income fluctuate, if not disappear, during the Covid-19 outbreak, are concerned they could find it harder to get access to finance.

Families who were ready to step on to the next rung of the housing ladder are also worried that purchases could be delayed by more than a year.

A report by Trussle, an online mortgage broker, found that would-be buyers expected to wait more than five months on average before they resume their property search. This would mean few transactions taking place before winter, which is usually a quiet period for the property market.

At the start of the year, Lucy Rees, of Wrington in Somerset, thought her family were about to move to a larger property. “We need more space for our three-year-old and five-year-old,” she said. “We were going to put our house on the market in January, but stupidly we didn’t.”

The housing market was then effectively closed by the Government, leaving the family in limbo.

Mrs Rees, 39, said she and her husband, Gary, were concerned they might struggle to get a mortgage once the crisis subsides. Both work as self-employed personal trainers and Mrs Rees estimated that she had lost a quarter of her clients, while her husband had lost half.

Although other clients have requested extra classes, Mrs Rees and other self-employed people are concerned that banks may not look kindly on customers whose incomes have fluctuated wildly.

Lucy Rees says her current home is too small for her growing family

Credit: Jay Williams

Miles Robinson, of Trussle, said: “Lenders may become more cautious towards self-employed borrowers if they believe that their income is unsustainable. Self-employed people who are now struggling to find work may struggle to secure a new mortgage.”

Mr Robinson urged banks to consider income projections, based on previous earnings, to help support those who might otherwise be denied mortgages.

Even then, Mrs Rees said her family were unlikely to move before 2021. “I think we’re not going to be moving this year,” she said. “Once you get into the process of buying, you are looking at months by the time solicitors get involved.”

There are concerns that house prices could fall because of the virus, but this would not necessarily be a problem for people such as the Reeses, as their new home would also become cheaper. What she feared more was confidence in the market disappearing.

“Things like this always hit the market hard and it takes years to come back,” she said.

Homeowners waiting to move could be paying more for their mortgage if they have allowed their deal to expire and moved to their lender’s standard variable rate, which is usually higher than rates on the best deals. They may be unwilling to take out a new mortgage on their current home because early repayment charges would apply when they moved.

Mr Robinson said homeowners should use tracker mortgages, which typically do not have fees for early repayment. Coventry Building Society also offers some fixed-rate deals without these charges, he said.


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