15 April 2020
This is certainly an unprecedented time for all industry sectors. But how is the UK residential property market holding up to the Coronavirus pandemic? At first glance, it would seem to be better than one might think.
The Royal Institute of Surveyors (RICS) March survey shows that 87% or surveyors have seen a fall in enquiries and 86% have seen a fall in instructions to sell. This is unsurprising considering the Government's recent advisories on home viewings and the country essentially being on 'lockdown'. The virus outbreak has also had an adverse impact on consumer confidence, with the GfK consumer confidence index dropping to levels not seen since the Global Financial Crisis (GFC).
Notwithstanding the above, a recent survey by Dataloft Inform reveals some interesting facts that suggest buyers and sellers are willing to be pragmatic and resilient to the challenges imposed by the pandemic:
- As a general rule, sellers do not want their property on the market for too long at the risk of it becoming ‘stale’. However, under current circumstances, the significant majority are willing to continue marketing their homes, despite there being little likelihood of a sale. This is presumably in the hope that that armchair buyers are spending lockdown browsing the market and there will be a 'rebound' from pent up demand once viewing restrictions are lifted.
- Buyers appear to be willing to stick with transactions with only 1% of surveyed agents saying the majority of their buyers were withdrawing from contracts.
- The average time between exchange and completion is normally 1 to 2 weeks, however this is changing as vendors and buyers either try to exchange/complete on the same day to remove the risk of a party to the transaction becoming ill or alternatively, exchanging and delaying the completion date. Mortgage providers are offering customers who have exchanged contracts the option to extend their mortgage by up to 3 months to enable them to move at a later date.
- Opportunistic interest from cash buyers and bargain hunters has not significantly increased, but this might change depending on how long the lock down continues.
- 88% of respondents to the RICS survey said they expected a fall in sales volumes over the next three months, but only 60% expected a fall over the next 12 months suggesting that they foresee a strong rebound.
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