The news that property viewings and home moves are allowed again was a welcome relief for many agents, as well as buyers, sellers and renters that were stuck in limbo. However, COVID-19 hasn’t just disappeared, there is still a long way to go in terms of getting anywhere close to what ‘normal’ was before the pandemic.
Viewings will have huge restrictions
The future of the property market will look different, not just in the next few weeks but also longer term. Yes, viewings are allowed again but social distancing is still required; viewers will not restricted from freely walking around properties, opening doors and touching surfaces, light switches etc.
There will be no open house viewings and sellers of the property will need to stay in the garden or elsewhere away from the property whilst the viewings are conducted. Then you also have to consider whether people feel safe enough to start viewing properties yet. There will be some high-risk people that are shielding and also many people who prefer to wait until the pandemic seems to be more under control before they search for a property or accommodate viewings that will enable them to sell.
Technology enabled viewings
Virtual viewings may become more common, rather than just being an interim solution and property valuations could also be completed virtually rather in person for the foreseeable future. The social distancing scenario has forced agents to further embrace technology and it is likely that all the processes involved in buying, selling or renting a property will be more digitally driven in future as a consequence.
Forecasted price declines
Housing experts <quote and source> are predicting that the property market could fall 13%, which works in the favour of people looking to buy, particularly property investors who are prepared to keep hold of the property until the market recovers. On the flipside, property owners who were considering selling their house might decide to wait a year or so to see if the property value rises again.
Following the easing of the lockdown to allow sales, it is expected that there will be a flurry of existing sales completions going through, where they were close to finalising the sale or purchase prior to lockdown. However, after that the property market could see a considerable slowdown, with sellers taking properties off the market if house values see an immediate decline.
The other problem that may contribute towards the slowing down of the market is that many people have been hit hard financially and we are yet to see the true impact of this.Reduced incomes and job uncertainty may cause people to be more cautious about buying or selling and even those with an appetite to proceed may experience an increase in affordability issues and struggle to raise the finance required.
The Government may decide to step up their support for the property industry, with potential solutions being a reduction of stamp duty. There are already mortgage holidays available for homeowners and tenants have been granted payment holidays. The recent eviction ban for tenants struggling to pay their rent will no doubt see some challenging times for landlords and increased vigilance and strategy will be required to maintain the returns generated pre-Covid-19.
Everything is changing so quickly right now that it is hard to make predictions for any industry but the property market is definitely going through turbulent times on a whole, so it is best to have plans ready for a variety of outcomes and as the dust settles understand the new landscape to identify the next phase of opportunity.