Published: 23/08/2020Covid-19 And Property: A Rollercoaster Ride of Epic Proportions
It’s fair to say that with the onslaught of the pandemic, the entire world was thrown into disarray. It’s also fair to say that of all the industries, property was up there in terms of uncertainty and potential chaos. So, what can be learned from the last four months and – perhaps more importantly – what might we expect from the property market moving forward?
Almost immediately, buying and selling came to an abrupt halt, with the housing market effectively closed for business. It had to be this way; with very real health and financial concerns, moving home was the last thing anyone was really thinking about, yet it was still a bitter pill to swallow following a 4.7% increase in London house prices back in March - the fastest rise since 2016 thanks to the ‘Boris Bounce’ and new political certainty post-Brexit.
Unsurprisingly, Zoopla reported a 40% drop in enquiries back in April, as soon as we started to realise the full gravity of coronavirus, but how long would this continue for? That was dependant on three main factors: 1. How much would mortgage lenders be willing to lend? 2. How badly would people’s incomes be hit? 3. How safe would potential buyers feel to attend viewings? An early action by the Bank of England was to lower its base rate, meaning people could take advantage of cheaper mortgage borrowing, whilst here at JT Homes we are proud to have been among the earliest implementers of safety measures, meaning we were able to provide a secure environment for those attending viewings.
Despite many returning to work, both incomes and savings have been hit substantially. In theory, therefore, buying a home has had to be postponed for many.
Having said that, it’s pretty much a foregone conclusion that more people are going to continue working from home than ever before, meaning the demand for more space is likely.
Talks of a second wave are not going anywhere, and if this is to happen, the brakes will probably be pressed once again. However, going on what has already happened, we can be relatively confident that we would be able to weather the storm and come out the other side once again if this is to occur.
The positive impact of the Chancellor’s scrapping Stamp Duty on properties up to £500,000 is already being seen across the industry, with new instructions and completed sales through the roof – especially within North West London where a clear ripple effect is evident throughout the chain of variously priced properties. Asking prices are also steadily creeping back up in response to this. From RICS to mortgage brokers, many in the industry are taking a positive outlook, with estimations hovering around the 6-9 months mark for a return to normality. What comes next, however, is yet to be seen.
Assuming that we can successfully come out the other side of this pandemic, the economy will pick up again – albeit at a potentially slower pace than we have become accustomed to.
What potential buyers are now looking for in a property has also changed drastically; whereas pre-pandemic a kitchen island and state-of-the-art bathroom were highly sought-after, now there’s a much greater emphasis on the importance of space – both inside and out, good wi-fi and the potential for home working. Spending so much time at home has made many realise just how vital this space is, nudging them, perhaps, into making a move that may not have been on the cards beforehand.
Lockdown has also accelerated the use of technology among estate agents, with many turning to video calls, virtual valuations and visual viewings. This can only be a positive step towards improving the property market – pandemic or not.
Speaking from personal experience, we’ve never been busier than we are now, and I believe this is a culmination of beneficial measures implemented by the government and safety precautions undertaken by us which has encouraged people to move forward with their property transactions.