We started to witness a bounce back in the property market following last year’s general election and Coronavirus means the property market has come to halt, for the time being anyway…
Not a downward spiral, just a stop for the first time ever!
Some expect reductions in prices, some expect a quick bounce back and others are seeing this as a huge opportunity!
Zoopla Cities House Price Index Report revealed that demand from buyers over the seven days to 22 March was down 40% on the previous week. It predicts housing transactions will fall by up to 60% over the next three months.
“Coronavirus presents a major new challenge – not just for the housing market but for the UK and global economies. Fifty years of history shows that external shocks have impacted the housing market to differing degrees, largely down to the scale of direct impact on the UK economy. The initial impact of external shocks is to reduce consumer confidence and put a brake on housing demand and the number of people moving home, which we can see in our latest figures,” said Richard Donnell, Director of Research and Insight at Zoopla.
Government says no to moving
The government is now advising people not to move house in a bid to try to limit the spread of coronavirus. They urge buyers and renters to delay moving while current emergency stay-at-home measures are in place.
There are some reports that banks would like a full suspension of the UK housing market with lenders worried at how the pandemic will impact valuations. There’s also concern over agreeing mortgages in a period of such economic insecurity.
Government advice states: “There is no need to pull out of transactions, but we all need to ensure we are following guidance to stay at home and away from others at all times…we urge parties involved in home moving to adapt and be flexible to alter their usual processes.”
Virtual Viewings and Valuations OK
Current restrictions mean that no viewings or valuations are allowed although you are able to speak to estate agents on the phone and conducts virtual viewings. This means there will be hardly any new transactions undertaken once the current pending completions have taken place.
The government has stated, “You can speak to estate agents over the phone, and they will be able to give you general advice about the local property market and handle certain matters remotely, but they will not be able to start actively marketing your home in the usual manner.”
David Hollingworth, director at broker L & C Mortgages, said “The purchase market will effectively go into cold storage. You’re just not able to go out and buy a house even if the vendor wanted you to come around.”
Most mortgage valuations have now been put on hold.
A Strong Start, a quick recovery?
All of this comes after the UK property market had its strongest start for four years in January and February 2020. The 20 cities tracked in the House Price Index saw on average +1.6% annual growth.
The general consensus is that the full extent of the property market downturn will rest on how effective government implementations are to support jobs and the economy.
This could be the biggest opportunity for many to invest savings, take a small leap of faith to benefit hugely in the long run.
CEO Peter Licourinos’ Comments
Brick and mortar has always proved the safest long-term investment and we do not see this changing. Be careful, get the right advice and be over diligent. With the right properties and areas coupled with being in a position to capitalise over the coming months and provide the market with the necessary buying power, you will benefit greatly!
If you are currently buying good investments, stay calm and continue. If you are waiting for mortgage valuations stay calm and continue. If you are looking to secure a great investment then stay calm and get in touch we would love to help you. Our dedicated service, Property Sourcing on Steroids, will help you source great BMV investment deals across Berkshire and Hampshire.
If you are worried or struggling to sell, then please get in touch. We have a back list of property investors currently looking to buy.