Getting Back To Normal – London Housing Market
3rd July 2020 posted in
The housing market has been operating for a while, and now, shops are also open in England. People are looking to return to normal, or at least move on. However, we know many people will have many questions regarding the housing market, and we are here to assist you.
It is understandable many people are looking for information regarding the housing market, and how prices will be impacted. Right now, it is too early to say with any great level of confidence, but there is no reason to be alarmed or overly concerned.
Nicky Stevenson, MD of Fine & Country UK said; “The Nationwide House Price Index reports monthly house prices down -1.7% in May. However, house prices only reflect properties that were sold, and with so few transactions during lockdown, this should be viewed with caution. Government schemes such as furlough and mortgage holidays, as well as the relatively unstretched financial positions of existing homeowners will help contain pressures and therefore reduce the impact Covid-19 has on house prices.”
There is confidence in the housing market
It appears as though there is a level of confidence in moving soon, especially from people who were committed to the moving process before lockdown occurred.
Dataloft Homemover Survey highlights:
· 95% of vendors whose house was on the market before lockdown still intend to sell their home
· 92% of buyers who were searching for a home before lockdown still intend to buy a home
· 83% of vendors who are keen to sell their home as soon as possible are very comfortable or fairly comfortable with physical viewings, as long as social distancing measures are followed
Stevenson continued by saying; “There is no doubt that it is going to take time for consumers’ confidence to increase and making big financial decisions will seem daunting to some. However, early indicators suggest that many are still able to enter the housing market and are keen to do so. It is expected that transactions will take between six and nine months to recover to pre-Covid-19 levels and prices to take 11 months. Long-term house price expectations are still strong, with an average annual increase of 2% expected over the next five years according to RICS".
There is plenty of life in the London housing market
Given the level of focus on remote working and the benefits of a rural lifestyle, it is no surprise that there is an increase in demand for homes outside of London. This has been highlighted by Guy Meacock from Prime Purchase, who said; “Much as it pains me to say it as a London buying agent, we are seeing a surge in interest in people moving out of the capital to the country. I seem to be referring numerous clients to my country colleagues as they turn their attention from a London search to something more rural.”
Meacock provided anecdotal evidence of one client who had previously been looking for a house in London but who now reasons that they can live in the countryside and he can work as normal. However, the fact this buyer was a banking CEO says more about one section of the market, than the entire market.
There will be many households who live in London doesn’t solely revolve around their work. Yes, for many people, the commute to and from work is the deciding factor in where they live, but it is far from the case for many buyers.
While there is an initial spike in London dwellers looking to move out, as life moves forward, it is likely people will revert to normal.
Meacock continued by saying; “The fine weather is helping fuel this move to the country, along with the realisation that people can work from home more easily and a quick glance at the portals to see just what you can get for your money. But those whose move was a kneejerk reaction may come to think rather differently in the depths of winter.”
Life in London has so much to offer
It is important to realise that there is a short-term nature to many property buyers’ activities right now. Much in the way there was a spike in demand for toilet paper and then sourdough ingredients in the early days of lockdown, it seems as though many buyers are focusing on getting out of the city and living a more idyllic lifestyle.
As time moves forward, and people consider their options more rationally, demand will likely revert back to normal, and the London housing market will welcome keen buyers once again.
It is also wrong to suggest there is no activity in London at all, this isn’t the case. There is a lot of activity in London, but people are deliberating over their options. Given the sums of money involved with London properties, and many people waiting for clarity regarding their job and the economy, this isn’t the time to rush into a buying or selling decision.
In some more affordable areas of the country, there might be scope for a swift decision to be made. In London, taking additional time to make an informed decision makes sense, and it is likely the market will revert to previous levels before too long.
There is a level of price uncertainty right now, which is another factor hampering the London housing market. Guy Meacock said; “It is difficult for agents to advise where to pitch the price with so little evidence of transactions in the last quarter. If sellers set their stall out too high, the market will seize up. There are two groups – those who want to get on and buy and sell, and those with their heads in the sand. There are plenty of bottom-feeders who will consider any location as long as it is cheap. However, they are wrong if they think plenty of people want to off-load prime flats. We are just not seeing it.”
There is cause for optimism surrounding the long-term nature of the London property market. There is so much on offer in and around the capital, there will always be people keen to live in this part of the country. Meacock spoke about London, saying; “Its attractions remain; while the life, energy, buzz, and the bright lights of the smoke may all be dimmed at the moment, they will be turned back on. if people are briefly considering a change in lifestyle, they will go back to what they know unless there are big life-changing decisions on the horizon. The London star will rise again.”
At Hunters Forest Hill, we know selling property is challenging, but we are here to assist you in the process. If you aim to buy, sell, let your home or rent property, we are active in New Cross, Peckham, Dulwich and Brockley, in addition to Forest Hill, so get in touch with one of the top three agents in London, and we will be happy to assist you.