As the fallout from the Covid-19 pandemic causes paralysis across industries globally, the impact on U.K. property and housing dynamics of 2020 is set to be severe. A lockdown means that no bank will even discuss mortgages for properties where a surveyor’s valuation is required, and Zoopla’s estimate that housing transactions will fall by 60% over the next three months is likely to be just the tip of the iceberg. Rightmove has already announced that it will slash charges for agents and house builders by 75% for the next four months from April, but the virus-induced malaise looks set to last much longer than mid-summer.
The housing market had just got going in 2020 after a Brexit-induced paralysis that had spanned three years, with January and February price growth the best start witnessed in the last four years. Now that economic uncertainty, banks’ withdrawal of much-needed new mortgage capacity and zero visibility at least until late summer have gripped the property market, where does that leave buyers and sellers? What can you do while you find yourself stuck at home?
One thing is clear, the remainder of 2020 and into 2021, the balance of power has swung firmly in favour of the buyer especially if you are a no-chain, cash buyer. Affordability metrics will also take a hammer blow for many self-employed and first-time buyers as job losses, furloughed employment and working hours are cut. Gone are the days – as recently as September — when the average discount-to-asking-price was less than 4% (Zoopla data).
Illiquidity will now mean that as and when house viewings and surveyors visits are back on again – and allow for several weeks to clear the growing backlog – asking prices will be cut and double-digit percentage discounted offers will return. In the meantime, if you are looking to sell, spend the time getting those tedious DIY jobs finished, checklist of to-do’s ticked and watch the back catalogue of Phil Spencer and Kirsty Allsop’s housing dynasty.
For would-be buyers, get your financial house in order, find out what the banks will need from you, shop around, get digital savvy and do your homework via google maps, property websites and general internet surfing. It’s going to be a bumpy ride, with many frustrations along the way but the single most important piece of advice for all of us? Be safe, be kind and be patient.