Estate agents are now open for business and able to conduct home viewings. Property professionals are also able to visit homes for “non-essential work” (such as building surveys). In short, the housing market is now, officially, open for business. Unofficially, it remains to be seen how long it will take to find its feet (or foundations?) in the post-COVID19 environment.
Finding a home to buy
It will be interesting to see whether the Coronavirus influences the process by which people find homes. Online property portals can already show photos and floorplans and have quite generous space for descriptions. Could the next step be video tours?
It’s an open question as to whether or not the property portals would be happy to host bulky video files, but if they’re not then there is nothing to stop estate agents from opening their own YouTube channel and hosting them there. This approach could make it feasible to reduce the number of in-person visits made, ideally limiting them to the most serious buyers. It would, however, have obvious safety implications.
These would not, however, necessarily be insurmountable. For example, if estate agents did use YouTube, they could keep the videos unlisted. Alternatively, they could simply store the videos offline and use standard file-transfer applications to send them directly to pre-vetted buyers. Alternatively, an estate agent might live-stream a tour in the same way as they might conduct a regular viewing.
The issue of supply and demand
Will the Coronavirus deter sellers from moving in order to limit the number of people they let into their home. If people are forced to move, will they increasingly opt to buy a new property and move themselves first to avoid contact with people who are viewing their old one? If either of these scenarios does occur then it could have unexpected ramifications for the overall dynamics of the housing market.
Life in the city versus life in the country
Working from home is nothing new but the lockdown gave it a whole new impetus. This has raised the question of whether it will become part of the “new normal”. Only time will tell, but if it does, or if it even just becomes more widespread, then existing city and “commuter-belt” properties may be passed over in favour of properties in less commuter-friendly locations.
Even if a person still has to go into the office, a commute which would have been unbearable five days out of seven can be tolerable if it’s just one or two days out of seven and the less frequently the person has to go into the office, the more feasible it becomes.
If the demand for less urban properties increases, then so may prices. It will, however, be interesting to see if a reduction in demand for city properties causes prices to fall or if there is a standoff between sellers and buyers with the former holding out until they are either forced to sell or receive an offer which meets their minimum expectations.
Financing a property purchase
Right now, the UK is caught between the aftermath of the Coronavirus and the arrival of Brexit. Both of these are highly unusual situations, which makes it difficult to predict what is going to happen. This could pose a massive challenge for mortgage lenders whose business depends on them being able to assess risk with a reasonable degree of accuracy.
In such an uncertain environment, mortgage lenders may opt to err on the side of caution and restrict lending to all but the very safest of borrowers, such as those with stable jobs in recession-proof industries and/or with sizeable deposits.
Your property may be repossessed if you do not keep up repayments on your mortgage.
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