Following the UK Finance household finance review this morning, Richard Pike at Phoebus Software says: “We can now see exactly how the first quarter of the year panned out and how the coronavirus lockdown had an almost immediate affect on the housing market. It is interesting though to see that the first-time-buyer market had been declining across most of the country even before the crisis. This could be a trend that continues, at least until housebuilders get back to full capacity and new build properties start to become available again.
“However, from every negative there is a positive and it appears that, without the general ability to ‘go out’ and spend money, people have not only spent less on credit, but have managed to save and also pay off debt. The number of borrowers that have taken payment holidays at 1.8 million to date, is considerable and lenders will have to be vigilant as the next wave apply for the extension until the end of October. As repossessions are also on hold, we could find that come November we have many households that will find themselves facing higher monthly payments than they had been managing before the break. This will be something that lenders will need to manage carefully.”