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27 May 2020
The last two months have been a strange time for us all, and the property market has been no exception. Across the UK, over 370,000 transactions were put on hold in March alone. Clearly, the coronavirus pandemic will have an effect on the market going forward but trying to predict what that effect will be at this stage is rather more difficult. Frustratingly, our levels of new instructions in February and March were the highest we had seen for 12 months before the pandemic hit.
Here in Wales, the market is still in lockdown – it is pretty impossible to move while social distancing! – with property viewings and valuations on hold until further notice. Our workload is literally like a simmering kettle that’s just about to hit boiling point as soon as we get notice that the market can open again. A number of our clients have everything in place to complete on their new properties and are desperately waiting for lockdown to be lifted so that they can move immediately. A large percentage of our clients are in chains where we are doing all we can to ensure that everything in the file is ready to go when the restrictions are eased, so we are expecting a sudden surge of activity when the rules are relaxed.
In England, as we know, the housing market is back open for business. By taking a look at what is happening with property sales across the bridge, we can get some idea of what to expect here in Wales when the Senedd allow the market to re-open.
While the UK Government’s easing of lockdown rules has been welcomed by many estate agents in England, the logistics of buying and selling a house are clearly much more complex than ever before. Buyers are being advised to take virtual tours before arranging viewings – a practice that is already common in new build purchases but could now become the norm across the board – and are having to sign health declarations and have their temperature checked on the doorstep, wear gloves and masks when they do go to see a property in person. We are fully expecting the guidance for Wales to be similar to this but will have to wait and see what is announced.
As we act for clients on both sides of the border, we have already had feedback from English agents saying that the early signs have been encouraging. Phone and email enquiries are starting to come back in again quite quickly and indeed, our own file opening team has been significantly busier in the last two weeks, taking new instructions from both sides of the bridge.
Of course, we don’t know yet what will happen with property prices. Knight Frank claims that in the wealthiest parts of London, the average offers being accepted are currently at around 89 per cent of the asking price. However, we must remember that this is in London, which is normally a completely different market to the rest of England and Wales.
Early signs are that the crisis hasn’t put off first-time buyers. Since the housing market in England re-opened on 13 May, online agency Zoopla saw a 350% rise in those looking to get on the property ladder, compared with the previous week. Despite the uncertainty in the market, first-time buyers are still able to pursue their dreams of owning their own property, as long as they have saved a sizeable deposit. Lending should remain unaffected and if you are looking to buy, it is unlikely that interest rates will get much lower.
The pandemic also appears to have shifted our views on what we want in a property, including where we want to live. After months of being confined to our homes during one of the warmest spells of weather in recent years, many people are looking to move out of homes in city centre locations with no outdoor space to more rural properties with bigger gardens and plenty of room to enjoy being in the open air. Again, we can expect the trend of people from Bristol moving out to Newport and Monmouthshire to continue, taking advantage of larger properties with larger gardens at significantly lower prices.
Having proved during lockdown that working from home is now a viable option for many occupations, I also feel sure that we will see an upturn in flexible working, with less and less people prepared to make the daily commute into big cities, preferring instead to work remotely and spend more time at home. In South East Wales, we expect this to mean more interest in properties in affluent, rural areas such as the Vale of Glamorgan and Monmouthshire.
There is no doubt that the effects of this pandemic on the housing market will be long-lasting. After what was a very promising start to the year with house prices and sales forecasts both rising, this crisis has set the market back in a way that none of us could have predicted. However, while the long term future is almost impossible to predict at this point, these early signs from England do offer some chinks of light for the property market and we will be watching with interest to see whether we follow the same pattern here in Wales. One thing is for sure. We will be ready when that kettle starts to whistle!
Harding Evans is one of Wales’ largest law firms. Our residential property team can look after all the legal aspects of buying, selling or remortgaging your property. We offer a range of quality and affordable services, all designed to make the process of moving house as seamless and as stress-free as possible. Get in touch with the team at our Newport office on 01633 235145 or our Cardiff office on 029 226 76819.