06, June, 2023

What impact could the Coronavirus have on the property market?

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For the last four months, property prices have been steadily increasing, known as the ‘Boris Bounce’ after the staggering Conservative vote in the General Election. With the year starting so strong, the property market was expecting to have an incredible year – but with the strike of the Coronavirus, what’s the expected outcome now?

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Currently, compared to recent years, the sustained level of buyer and seller activity is still healthy, with a high percentage of homeowners still looking to complete their sale or house purchases that were in the pipeline before the outbreak. For now, it’s somewhat of a waiting game to see what effect the virus will have on the property market for the next few months, but for now, things are holding steady.

Interest rates have dropped to the lowest rate in history, sitting at 0.25%, so there is an argument that now is one of the best times to secure a house purchase with mortgage rates being as low as they are. The difficulty is getting things moving; with the lockdown in place, many moving homeowners have been stopped in their tracks and are unsure when they will be able to continue the process.

What issues will those with moving dates already planned face?

While the recommendation from the government is to halt all current house sales and purchases for now, this isn’t doable for all homeowners. If you’re currently planning to move, there are some issues that you may face –

  • Many removal vans are not willing to operate and have been advised not to under the new recommendations, so you may find that if you had hired removal men to help you move that they are no longer able to do so
  • Booking any viewings will be complicated; however, to combat this many agents have been able to offer video viewings, to limit contact but still provide the best service possible
  • Buyers may request the house to be ‘decontaminated’ before buying, primarily looking for a deep clean to minimise any risk of potential infection
  • If any repairs or redecoration is needed before moving in, this could be difficult. While those who are considered key workers are still working, you may find some workers are unwilling to enter houses currently, and so any non-essential work may be hard to schedule for the foreseeable. This doesn’t mean that you won’t find someone who can do the job, it will just most likely be more difficult.

What is the most likely outcome that we’re expecting from the outbreak?

Short term, it’s almost certain that house price growth is going to stagnate, with fewer and fewer transactions managing to reach completion as the prices drop. It’s impossible to say how much they will fall – at this point, no one has any concrete answers, so it’s a case of waiting it out and seeing how things progress. Long term, things will level out after the pandemic has passed and the prices will start to build once again. The UK property market is incredibly robust and can take a lot of strain, as it has done in the past.

What is being done to try and combat a potential slump?

There is only so much that can be done, as prices drops are inevitable. However, Rightmove have put some measures in place to try and keep the morale of buyers and sellers up, and keep processes going as smoothly as possible. Not only have they started to defer payments that agents and householders pay to use their site, but they have also cut their fees by 75% for the next four months, making the cost of selling a house lower and trying to encourage the market to continue without too much of a disturbance.

Can I still move house during the lockdown?

Under government recommendation, it’s best to try and delay moving processes for the next few weeks wherever possible. All parties involved should try and be as flexible as they can, as this pandemic is a first and so the protocol is still being outlined. Everyone is in the same position, so trying to delay moving for now is the best thing to do. However, this isn’t always doable and will depend on independent circumstances, so if you find yourself having to move and unable to delay it, you should do your best to follow the social distancing recommendations, keep contact to a minimum, and be as careful as possible. Removal firms may not be an option, which could mean you’ll have to rely on moving your own furniture. While this is more work, it does allow you to follow the social distancing recommendations more easily, hopefully allowing for a smoother move for you.

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Can I still view properties?

Almost all estate agents have closed their doors; however, some can work from home and are still conducting video-viewings. This is a clever alternative to combat the issues that we’re all facing at the moment and is the best alternative to keep the market moving as much as possible, while still obeying the restrictions and keeping everyone involved safe.

Overall, the most important message to take away is that no matter what could happen in the next few months, the best way to look at it is by considering the long-term. Property is an investment for any homeowner, and the property market has been hit hard in the past but always recovered, becoming more robust over time. For now, no-one knows what the drops that we may face are, but by remaining positive and looking past the next few months, homeowners can be confident that the effect will not be a permanent one.

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