The news that the housing market can restart has come as a huge relief to many, including estate agents, prospective buyers and sellers. Whilst it’s good to know that the market is starting up again, the repercussions of Coronavirus are yet to come. Since the start of the UK COVID 19 lockdown, more than 373,000 transactions in the housing market have been on pause. So, what do the latest guidelines from the Government really mean and what impact will they have? We breakdown the guidelines below and discuss what changes we expect to see in the market.
Have buyers priorities changed?
Since the UK Government has given the go ahead to kick start the property sector, Rightmove reported five million users scouring their listings in the first 24 hours since the market reopened – a 4% increase on the same day last year. Demand has somewhat returned to the pre-lockdown level, but have buyers’ priorities changed? Estate agents have reported an increase in people looking for homes in more rural areas with home comforts including work from home amenities also taking priority.
The Royal Institution of Chartered Surveyors’ market report suggests house prices could fall by at least 4% in the immediate aftermath of the current pandemic. Judging by buyers’ new priorities it’s likely that sellers with smaller properties in cities could be hardest hit. How likely we are to see a surge in those relocating to the countryside is yet to be confirmed, but those living in rural areas or close to the coast may see their houses become more valuable in the long term.
House viewings as we know them are a thing of the past. The new rules mean that where possible initial viewings should be virtual and physical viewings should follow strict social distancing measures. Buyers will only be able to visit properties in twos, current occupants will be encouraged to leave their properties for viewings and those that are high-risk will be obliged to leave. Pets should be taken with the occupants where possible, or confined to one room at a 2m distance. Buyers’ will also be questioned on their health before being allowed to enter other people’s homes.
Estate agents should be equipped with disinfectant and be prepared to open doors with their elbows, turn lights on with their knuckles and even keep speaking to a minimum - leaving the discussion to outside of the home to avoid the spread of the virus orally. All of these steps are set to make the already stressful buying and selling process more difficult. On top of this, we’re likely to see price rises from builders, surveyors, agents and removal firms as trade bodies devise new protocols for working safely. Whilst the new rules have helped reopen the sector, they are likely to add complexity and cost to the process.
Although the market is restarting, things are likely to be slower than usual for some time whilst buyers, sellers and agents get used to the ‘new normal.’ On top of the new processes, the inevitable economic uncertainty will make people less likely to consider making big purchases. CBRE believe the sector could make a strong recovery by 2021 based on an expected spike in activity.
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