We very much welcome the opening of the housing market in England. Housing Secretary Robert Jenrick announced on the evening of 12th May that the Government is encouraging the completion of an estimated 450,000 transactions which were put on ice at the start of the lockdown on 23rd March.
Currently this restart only applies in England, but we hope and expect that it will only be a few weeks before property sales can be resumed in Scotland, Wales and Northern Ireland.
There are important caveats to bear in mind – buyers, sellers and indeed landlords and tenants must take measures to ensure they are not putting themselves or others at risk of contracting or transmitting the coronavirus. What does this mean in practice?
Physical property viewings are now permitted, although the process is slightly more complex than previously. The days of ‘Open House’ viewings are unlikely to return in the near future.
The recommendation is that viewings are limited to a shorter time frame than previously, with a gap between each viewer. Only members of the same household will be permitted to attend a viewing. The home owner should not be present in the house when the viewings are taking place. An agent is permitted to accompany the viewer but must maintain social distancing.
Before the first person arrives and following each viewing, the instructions are to clean door handles and prominent surfaces.
Since viewings have not been possible through lockdown, we have been taking the property to the viewer. We have been heartened by the success of virtual tours and digital property viewings over the past eight weeks, which have proved very popular with house-hunters and will certainly continue in the future.
The advantage of the new system for sellers may be that the majority of people will undertake significant research and take advantage of a virtual property tour before attending a viewing in person. This may restrict the number of people attending a viewing to only those who have done their homework and are seriously considering making an offer.
At completion or “moving-in-day”, a delay of 72 hours will be required between the vendor moving out and the purchaser arriving.
Mortgages are now being made available on the basis of 95% loan-to-value. The majority of loans are currently below 75% loan-to-value (approximately 62% of mortgages are below this threshold) but it is a welcome development to see an easing in the possibility of credit for those seriously impacted by the economic crisis.
Something to watch out for - there is a risk for those who secured a mortgage at a time when they were in employment and are now on furlough. It is prudent therefore to expect that banks may impose additional conditions or require an extra security in this case.
The very low interest rate (0.1 % at the time of writing) presents an opportunity for purchasers requiring a mortgage to shop around and secure a good deal.
The first three months of this year showed a thriving property market in the North of England with strong demand, sales concluding relatively quickly and a good supply of homes being brought to the market.
Depending on the pace of the re-emergence, I expect house prices to remain stable, due to a relatively restricted supply of houses coming up for sale and the likelihood of pent-up demand. However, there are many moving parts in the current situation which may make our best estimates off target.
What we can say with absolute certainty is that people are looking at property online. Visits to the Galbraith web site are up by 21.3% since the lockdown began and our social media reach grew by 28.54% over the same period.
Rather like the period between Christmas and New Year, there are people who are indoors more than normal and are assessing the positive aspects of their home and the elements that can be improved upon. We always see a flurry of enquiries in early January and I expect this period to show similarities.
We at Galbraith have not been sitting still over the past eight weeks. We have a well-honed database of registered applicants who are serious about their next property purchase. We have used this time to work closely with our registered buyers to understand what they need and to provide them with detailed information about a particular property as well as information on the local area, even its pro’s and con’s.
The portal OnTheMarket allows buyers to select ‘show online viewings first’ if they want to prioritise properties with virtual viewings available but not completely rule out those without. Many of the purchasers I have talked to over the past few weeks have found this tool extremely valuable.
Certainly for the short term, agents will most likely be offering a boutique service, matching the needs of buyers and sellers. This approach has the advantage of perhaps enabling fewer viewings to take place – only the extremely serious buyer will go to a property viewing in person, perhaps speeding up the process of a sale once the restrictions are lifted.
Customers should, as always, feel empowered to chat to their agent about their property needs and I very much hope you will contact me if I can be of assistance.