How is the property market really shaping up?
Since the end of Lockdown restrictions in May, Estate Agents, Landlords, Tenants, Buyers & Sellers have been free to go about their business. What’s been happening?
There are numerous industry commentators reporting anything from growth at 1.4% to a 20% decline in the property market. Rightmove have been full of optimism, but what have our clients and customers been saying? We are at the coal face every day. What have we seen, on the ground?
Firstly we concur that January and February were great months with everyone coming back to the market with more certainty after the general election. Coronavirus hit and we weren’t aloud out of our houses to do viewings. Sales & Rentals were thwarted overnight.
Many of our tenants received news from their employers that altered their need to live the same lifestyle as before. Tenants lost their jobs. Buyers pulled out. A handful of transactions completed nevertheless, but there was plenty of blood. We wrote to everyone of our landlords and tenants to give them peace of mind BEFORE they wrote to us. We reassured our closest contractors/employees that their work with us remained safe.
We spent much of March & April doing two things – putting out fires & fine tuning our video marketing. Much negotiating with tenants and landlords on rent holidays & early contract terminations. Whilst material changes occurred on only about 10% of our stock, we had to field questions, make decisions, communicate with about a 3rd of our tenants. Prime North West London was hit hard and in particular the ‘young professionals’ market, which covers anything from a house share to a 3 bed flat. None of our tenants in fine family homes with gardens contacted us with problems.
Interestingly since the lifting of lockdown, regardless of what side of the market they are on, or what income levels, I have spoken to many that are making life changing decisions because of the crisis. Whether they are moving abroad, out of town or into a new career, change is afoot and it is true that many in London are adding ‘outside space’ to their property search criteria.
The main focus of our business is ‘Fine family homes with gardens’, this can be a house share, a 3 bed flat or a 3000 sq ft house in St Johns Wood. We believe that many aspire to this idea of living, now more so than ever.
What does the rest of 2020 hold? More uncertainty I’m afraid. A lot depending on a 2nd wave. Another lockdown will be painful. We’re just getting up off the ropes, some won’t recover from another blow and will quit. Others will be able to deflect the blow because they’ve been fighting for so long, waiting for the opposition to tire and will then sweep up the pieces.
Rents are around 10% down, more at the lower end. We have too little data on the sales market to make a call. There is plenty of anecdotal evidence of sales falling through, down valuations by lenders and withdrawals. This has attracted the attention of the vultures (forgive the expressions, I know it’s just business) and we have several keen buyers on our books – but at what price? If you need to sell now you’ll have to take a hit. But who wants to sell during one of the worse economic crises in our history?
If you are thinking of buying, then it could be argued that now is the perfect time to pitch in – be brave when all around you are fearful.
On the tenant side, I am seeing plenty of enquiries starting to come through from those moving to London in September. Traditionally this is a really busy time of year and I believe that this will go some way to supporting prices. But right now, there are plenty of landlords that just want their property filled – bargains to be had. One of our landlords had a gorgeous 3 bed flat available at a 25% discount and it was snapped up within 24 hrs. So that’s the bottom line.
We have also got one eye on the future of estate agency… the relationship between landlord/vendor, tenant/buyer, estate agents, the portals & tech advances. There’s been plenty of attempts at ‘disruption’ but nothing has dramatically changed quite yet. Many start-ups come and go, I believe because they forget one important thing. Agents like oursleves have spent 10, 20 + years building a database, a list of contacts. You can’t buy that, it’s invaluable. I’d like to think that during this crisis we have proved our worth more than ever. The future depends on the quality and the power of your network. More on this another time.
I wish you all well and feel free to get in touch if you want to chat about anything at all. Here to help.
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