The UK government, on the eve of lockdown, firmly pressed ‘pause’ on the housing market – freezing the ability to buy and sell homes for the immediate future.
Property professionals and consumers were asked to rally behind the public health message of staying at home which involved the difficult decisions of delaying transactions and putting mortgage offers on hold.
Demand from buyers fell long before an official lockdown was imposed. According to Zoopla, consumer interest fell by 40% in the week before lockdown as fears kicked regarding the safety of engaging in social contact.
As lockdown continued official HMRC completion data showed that housing sales were more than halved in April and warned that those transactions were only likely a result of exchanges that occurred long before the pandemic hit the UK.
The property market was effectively “put on ice,” in a bid to control the virus.
With the UK government announcement of a partial lockdown and the Housing Minister Robert Jenrick’ s Statement in mid-May of the reopening of the housing market - a glimmer of hope was given, and the housing market prepared for regeneration.
Property market professionals reported a surge in the activity once the UK Lockdown eased. Knight Frank saw a surge in registered buyer interest within London. However, the agency still predicts that over 500,000 sales could be lost as a result of social distancing measures.
Whilst the pent-up demand could be from those consumers whose transactions got stuck in the pipeline just as the lockdown was enforced, there is evidence to suggest that on a whole consumers are reconsidering their needs for a home and are on the quest for better living arrangements.
According to a recent Nationwide survey, around 15% of respondents stated that the coronavirus pandemic has made them consider moving homes. Moreover, 45% stated they were more aware of the need for outdoor space.
This is in line with recent research carried out by Knight Frank – with agents reporting a surge in activity for housing outside the capital.
Whilst these stats cannot be correlated to an increase in sales nor a bounce-back of the market, they do indicate that consumer interest and activity has not necessarily been stifled by the pandemic.
The reality is that a V-shaped bounce back of the property market is unlikely as the public remains divided on how to ‘carry on’ with life post-lockdown. Reports and public opinion polls have suggested a fairly even split in public opinion regarding the reopening of the housing market.
Moreover, confusion and anger have permeated the new property ‘normal,’ with reports of consumer backlash regarding certain property viewing restrictions.
The reported surge in demand as a result of previously uncompleted transactions is a welcomed sight.
However, the property sector still remains uncertain and unpredictable, and the poll on consumer attitudes, though with small basis, hints at latent vendor wariness that could suppress demand.
It could take many months to see the restoration of consumer faith as worries around health and safety remain paramount. However, as emerging trends show there is an underlying appetite to seek out alternative living arrangements as individuals reconsider their ideal versions of a home.
The strategic approach to be taken by lenders will be crucial, as will possible governmental interventions.
Moreover, how individual estate agents and property market professionals adapt to drastic changes within daily operations is also key for the bounce-back of the property market. A balance needs to be struck in order to move purchases along safely and securely from a distance.
Indeed, COVID-19 has stressed the importance of digital readiness and illuminated how technology can be utilized to regain functionality despite social distancing measures.
From digital viewings to remote communications, technology has the power to assist the property market to continue business as usual in unusual times.
Digital checking has received the backing of various official authorities. Guidance has been issued by the Conveyancing Association in collaboration with other bodies such as the law society to state that electronic ID checking should always be used in compliance with AML regulations as they have confirmed they are more reliable.
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