Social distancing measures have made it very difficult for the property industry to do much more than tread water over the last month. How long the situation will continue is not yet clear but many are predicting a loosening of the lockdown in mid-June. We won’t know, though, whether that includes the property industry until nearer the time.
The case for its inclusion, however, was recently made in an independent report by Conservative peer Lord Ghadia and GlaxoSmithKline chairman, Sir Jonathan Symonds, in which it’s claimed restarting the property industry should be a priority, as it is likely to have one of the biggest impacts on our economic revival as well as presenting a low infection risk.
In the meantime, a surprising number of sales are still being concluded. A Rightmove survey suggest 40% of buyers who had agreed purchases prior to the lockdown are continuing as normal. 54% said they intended to resume the process once it’s over and just 6% of deals have fallen through. And to give you some idea of the numbers, Zoopla estimates there are 373,000 sales currently being held up by the corona crisis.
Miles Shipside, Rightmove director and housing market analyst says:
“Agents report that there is good co-operation, with both buyers and sellers keen to hold deals together. While some buyers may express concern over the possibility of short-term dips in house prices, many are taking the longer-term view and living up to their commitments to proceed. This is being helped by mortgage lenders extending the life of existing mortgage offers by three months, and new legal rules on flexible completion dates.”
The portals are also reporting that, after an initial dip, there is plenty of interest in new properties and there’s no shortage of things to look at as very few vendors are withdrawing their properties from the market. Zoopla’s listings are down by just 4.0% and Rightmove’s by 2.6%. As we reported last month, virtual viewings are proving particularly popular, but there are also quite a few homeowners making their own ones to send to agents in order to get a valuation.
But how will viewings work once the lockdown is over? Industry body, NAEA Propertymark, are currently drawing up some new guidelines. These include much of what is already being done in the retail environment, such as the use of personal protective equipment, limiting numbers of viewers and the liberal use of hand sanitisers and wipes. It also advises minimising contact by leaving doors open and that, during the viewing, vendors should remain in separate parts of the property or vacate it altogether if it’s a small flat. Despite all these measures, there is no doubt, there will still be a degree of nervousness until we get used to the ‘new normal’.
When the market does restart, many are calling for a stamp duty holiday to boost activity but with the government’s finances stretched by the crisis, it remains to be seen whether foregoing the revenue it generates will be possible. A compromise may be to keep it to a very limited time period, to help overcome any residual nervousness for both buyers and sellers. Hopefully, we’ll get a better idea of what to expect in the next couple of weeks.