Will Leyland, 04 June 2020
The housing market has re-opened and whilst it’s still far too early to draw any sort of conclusion towards how things have fared since the government announced they were able to re-open their doors, there have been some short-term observations that we can probably address.
First and foremost, it’s that there’s been a flurry of activity so far, but that can most likely be put down to the fact that there was a lot of latent activity waiting to complete. It was reported widely that up to £12 billion worth of property deals were waiting to complete, and this would account for most of the early activity whilst estate agents clear inboxes and workloads as they return to work.
However, having said that there is a high likelihood that this busy period may sustain through the summer as stir crazy Brits seek to move property following a sustained period indoors.
There’s a fairly good chance that for a good chunk of people that had the idea on their mind beforehand, that now would be an opportune time to take the plunge and either find a new rental property, or sell up and find somewhere else.
That being said, that has to be taken in the context of a generational economic shock and widespread anxiety about jobs and incomes. As with any time of upheaval it’s quite hard to predict just how that will bare out over a longer period.
So, based on the available evidence, what do we think we’re likely to see in the property market for the rest of the year? This again has to be tempered against a volatile outlook, but the chances are that the activity that’s raring to go will likely happen quickly before a lull, before more cautious operators finally make their minds up later in the year.
What does that mean for buyers, sellers and renters? Well, ultimately it means act early.
In this early stage there will be an awful lot of activity, so you may find that you would reasonably have expected more time and less interest whilst looking through your available properties before the pandemic, you’re now likely to find that those who would have previously held back are called to action.
That may mean that the property you’ve had your eye on could see a sudden surge in interest driving the price up, which spells bad news. If you’re in the early stages of negotiations then it’s potentially advisable to get your skates on before prices rise.
Similarly, things may go the opposite way but it’s a risk regardless.
Just as itchy potential buyers may well descend on your prime property looking to get a piece of the action, subsequently driving demand and the price up, it’s also likely that they may be offered a sudden expanse of choice too.
This is likely to be highly area-dependant, but as we all know property sales and purchases often occur in chains, and those that may have previously considered it too early to take the plunge might suddenly see this new found freedom as the excuse to finally get on the market.
That being said, as is the advice for buyers, right now is probably the best time to either get on the market or advance further through negotiations whilst prices are stable and interest is similar to demand.
In this case, unfortunately, it’s likely there will always be a significant gulf between demand and supply, however, this is likely to be quite pronounced following lockdown.
The caveat that faces renters is that their fixed-term tenancy agreements usually only come to an end once a year, leaving them a very short window to negotiate and look around for alternatives before committing to another year at their current property.
It’s also true that 3 months of tenancies haven’t had a chance to expire and allow new customers into the market, meaning you’re now facing a potential three-fold increase in competition. If there’s an available property with your name on it then it’s highly advisable to get your name down quick because there’s likely a queue of people behind you.
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Will Leyland, 04 June 2020