How is Coronavirus Impacting the Property Market?Admin
Until recently, coronavirus has caused a temporary pause for those in the process of buying a property. An estimated 450,000 people have been unable to complete their moves since March 2020 due to lockdown.
With the current change to government guidelines on social distancing over the coming weeks, it is hard to predict how coronavirus will affect the housing market.
In this article, we will explore how the halt in the property industry could affect the future of the housing market and what those in the industry predict.
Where Are We At The Moment With the Property Market?
As of May 13th, the housing market in England has been re-opened by the Government. Currently, the property market in Wales, Scotland and Northern Ireland remain closed with tighter lockdown rules in comparison to England.
Previously, the country has seen a seven-week pause on house purchasing with the cancellation of viewings, estate agent offices closed and home moving companies unable to continue their duties of moving house valuables for non-essential situations.
The Logistics of Viewing Houses
What are the procedures in place for someone who wants to view a property? At current, it seems to be a slightly grey area in terms of logistics and the reality of keeping in line with social distance practise.
If following social distancing regulations, the following procedures are approved according to Government guidelines:
- People can only visit offices of an estate agent’s through an appointment scheme, and sufficient regulations are in place within the office to ensure no contact takes place.
- Virtual house viewings should be recommended at first.
- A personable viewing can only happen if the likelihood of an offer were to take place.
- When viewing a house, the current owners must not have COVID-19 symptoms or have completed self-isolation if they have.
- Viewings may only happen by one viewer to one house at a time through the organisation of an appointment.
What Is Not Permitted By the Government For House- Viewings?
The Government have not condoned:
- Travel with agents to properties.
- Open-house viewings.
It’s Early Days to Predict the Effect on the Housing Market
In a recent article, Which? describes the data up until May unreliable when as predicting the impact of coronavirus on housing prices.
Land Registry’s UK House Price Index has been referred to as the ‘most reliable barometer’ at current. However, the timeframe from February is not advanced enough to calculate a sufficient prediction. This is mainly because of previous property purchasing arrangements which were not affected by the Government implications in reaction to COVID-19 and run into the February data.
Consequently, figures are affected and suggest that prices have only decreased by 0.6% in a month to month comparison during this period. In addition to this, the same data also suggests that prices have increased since the previous year by 1.1%. Both figures highlight the unreliability of the current data.
Other Predictions on the Effect of COVID-19 on Housing Prices
Branches of estate agents have also tried to predict how they think the housing market will develop in the future. Figures range from a percentage decrease of three to five to 10 percent in housing prices within 2020.
In terms of rises in 2021, figures again vary from five, four and two percent increases.
As the predictions suggest, there is no clear or definite answer.
What Is Needed to ‘Kick-start the Market’?
In terms of ‘kick-starting the market’, Rightmove has stated which three elements will be needed to support the property market after coronavirus restrictions are lifted.
- The lending of low-cost mortgages to be prolonged.
- Inventive and successful ways to effectively view houses.
- A limit to ‘forced sales’ by lenders.
An Increase In Website Visits
One positive report is the increased level of interest to estate agent and online property sites as we head into May.
Savills has reported a 17% increase in the early week of May. Rightmove has gained a 20% interest to the site since lockdown rules were first installed.
A Positive Outlook
Housing is a necessity. Both the need and desire to have a safe home is something that will not change. With this perspective, we can feel secure that the demand for houses is not something that will no longer be required.
If you are currently in the process of buying or purchasing a house in the South West, please contact us to find out more information about how our expert chartered surveyors in Cornwall and Plymouth can help you through the process.