Housing market hopes for post-virus bounce but remains cautious

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The UK’s housing market could seen a post-lockdown bounce now that estate agents are able to open their offices and arrange viewings – provided house-hunters wear PPE.

Sales and lettings offices across the country are now back in business and there are hopes that pent-up demand for homes, stifled first by Brexit and then by the coronavirus outbreak, will be let loose.

But there have been warnings that it could take months for the market to return to pre-pandemic levels and there is concern about whether house prices will dip.

But with surveyors now able to enter buildings to complete valuations, and prospective buyers and renters able to view properties, it is hoped deals will increase.

Completed and under construction houses at Sherford in Plymouth

It is estimated there are 450,000 buyers and renters around the UK with plans on hold and that these will now spring into action.

The market may also be boosted by removals firms being able to operate again and low interest rates, though there are calls for further help from the Government, perhaps a stamp duty holiday.

Although the Royal Institution of Chartered Surveyors (RICS) reported a near total collapse of transactions and new-buyer inquiries in April, after property viewings were suspended by Prime Minister Boris Johnson on March 20, some activity continued.

South West estate agents Atwell Martin said more than 30 homes were completed on throughout the region, just from its Plymouth office, during the lockdown.

Andrew Bullivant, a partner at the firm, said: “We are really pleased to be going back to work.”

He predicted the market would recover and said: “We have got a lot of pent-up demand. Brexit delayed people making decisions about moving. Once we got clear of that on January 1 we saw a huge upswing in transactions, until this (Covid-19) happened. This has cut that off, but I’m anticipating it will not be a problem, there is enough demand in the system.

“I think we will have a reasonable second half of the year,” he added. “But let’s see how we go.”

Mr Bullivant said viewings are restarting but stressed precautions would have to be taken, including social distancing and use of PPE.

He said staff would be provided with protective gear but people wanting to view properties, particularly those already occupied, would need to bring their own face masks and gloves.

“It’s prudent,” he said. “But if the Government advises something different we will adopt it.”

Dean Reeves of One Agency
Dean Reeves of One Agency

Dean Reeves, who runs property company One Agency, based on Festival Park, in Stoke-on-Trent, said: “We have been working from home since lockdown, I have been doing things like visiting empty properties to film virtual tours and we have been advising sellers to submit videos to us to allow people to view their properties.

“We have had a few completions that have taken place throughout this period for empty properties too.

“Now we just need to assess the appetite from the public because there will be people who will be ready to crack on and others who might be a bit wary.

“I have been reading the guidance issued by the Government and it outlines things like an appointment system for meetings, not conducting open viewings and advising home-owners on how to prepare for viewings like cleaning door handles and social distancing, but really it is just about taking a common-sense approach.”

He added: “I expect that short-term, estate agents will have a period of high activity because people have wanted to do things but can’t, but it’s too early to know about what will happen long-term.

“Throughout all of this, the sales we have agreed pre-lockdown are still going ahead, nobody has pulled out so it’s nice to see that people are still committed to follow through with their plans.”

Ramona Hirschi
Ramona Hirschi of the Stoke-on-Trent Belvoir lettings and estate agents franchise

But Ramona Hirschi, the owner of the Stoke-on-Trent Belvoir lettings and estate agents franchise, warned that things are not “back to normal”.

She said: “It is clear that this needed to be done to get the housing market moving again, but we see a lot of random people every day through viewings and inspections so we can’t go full steam ahead.

“Further guidance has now come out which is similar to the business plan I prepared for a return to work in June which says things like making appointments, doing as much as possible electronically, office cleaning practices and not having everyone in the office at the same time.

“It is trickier when it comes to viewings and inspections, but we have been doing things virtually and we plan on continuing to do that, at least for the rest of the month, and will review it in June. We have been asking tenants to send us photographs or videos to allow us to compile inspection reports.”

She added: “The rental market is very different from the sales market but we have still seen a lot of people making enquiries throughout lockdown and that has surprised us actually.

“We expect that it will be busier in the coming months because we expect everyone who has put things on hold to come back to us now that they can put their houses on the market, but from a buyer’s perspective, it depends on things like banks, lenders and valuers.

“It is also likely that house prices will drop which is unfortunate because it’s not like the housing market has crashed or the value of properties has dropped, we have been forced to pause. So things are very far away from being back to normal.”

Dean Birks, managing director of Signature Financial Services
Dean Birks, managing director of Signature Financial Services

Signature Financial Services in Newcastle-under-Lyme specialises in a broad range of financial services, including mortgages. Managing director Dean Birks said: “The Government has said it wants to get people back into moving homes and that’s great, but the logistics of moving home and valuing properties with circumstances how they are means that that’s going to be challenging from a practical point-of-view.

“It’s about making sure things are done safely and that people are fully aware of the Government guidelines. It also comes down to how confident people are with moving and with the professionals who are providing the service.

“There’s lots of pieces of the jigsaw that need to be put together to make sure everything functions well.”

Jon Rawley, business development manager South West, at Skipton Building Society

Jon Rawley, business development manager South West, at Skipton Building Society, said surveyors being able to carry out physical valuations will help stalled housing transactions get moving again.

But he added: “Whilst there’s some expectation of pent-up demand it’s also difficult to make any clear predictions about what impact lockdown – and the state of the wider economy – will have on property values.

“Nevertheless, after six weeks of falling numbers of housing transactions, the opening of estate agency offices and allowing surveyors to visit properties again is a positive step.

“However, we should be mindful that there may still be challenges ahead; property visits where the occupants are vulnerable or ‘at risk’ may not be possible and visitors will need to ensure that any PPE required is easily accessible.”

Housing, Communities and Local Government Secretary Robert Jenrick, during a media briefing in Downing Street, London, on coronavirus (COVID-19)
Housing, Communities and Local Government Secretary Robert Jenrick, during a media briefing in Downing Street, London, on coronavirus (COVID-19)

Housing Secretary Robert Jenrick said viewings must be carried out under social distancing and safety rules.

“Our clear plan will enable people to move home safely, covering each aspect of the sales and letting process, from viewings to removals,” Mr Jenrick said.

“This critical industry can now safely move forward, and those waiting patiently to move can now do so.”

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RICS, however, wants more Government help for the sector and Simon Rubinsohn, RICS chief economist said: “Housing activity indicators collapsed in April reflecting the impact of the lockdown. Looking further out, there is a little more optimism but the numbers still suggest that it will be a struggle to get confidence back to where it was as recently as February. Moreover, whether this can be realised will largely depend on how the pandemic pans out and what this means for the macroeconomic environment.

“Critically, to ensure the housing market can begin to operate in a more functional way and that developers have the confidence to continue building in these very difficult circumstances, further specific interventions from Government, following on from the announcement of flexible site working hours, and support to smaller developers, are likely to be necessary.”

Hew Edgar, RICS head of UK Government relations, added : “RICS last month called on the UK Government to explore confidence-boosting measures for the residential market as it reopens, and the data suggests that our proposal for a stamp duty holiday would be a successful change that would boost transactional activity, helping people move home.

“There are, of course, other options available to Government as they reopen the market, notwithstanding stamp duty options such as reducing or removing stamp duty for downsizers that would kick-start market fluidity, and we look forward to continuing conversations as the market starts to move again.”

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