The coronavirus pandemic has caused unexpected changes in the property market of the UK, as viewings and sales have been halted and activities in the market slowed during the lock down.
Some of the activities are slowly resuming, but house-hunters and sellers will be required to adapt to some big and significant changes. What does that mean to individuals looking to buy a property or sell their home?
What Went on During Lock down?
Activities in the property market came to a halt during the lockdown. Viewing of property was not allowed as it would have been against the lockdown rules. Some agents were quick to adapt and started doing video tours of homes. However, this wasn’t as fruitful as most property buyers wouldn’t take the risk and make their biggest investment based on a video.
Removal companies weren’t operating as well, so moving to a new house was almost an impossibility – although property owners who were moving into empty properties were exempted.
During the lockdown, mortgage companies began pulling their products. As such, the only individuals who could access new mortgages were those who had the highest loan-to-value.
Most mortgage companies insisted that they had an overwhelming load of work and a shortage of staff, and therefore needed to reduce the number of new customers. They cited this as the reason for restricting their loans to customers with the best metric – individuals borrowing amounts less than the value of their properties.
How About Now?
Property viewing is now possible, as long as the agents and property hunters follow the guidelines put in place. Estate agents are urged to initially offer virtual viewing, which is either a pre-recorded video of the property walk-through or where an agent is live in the house.
For in-person viewings, the government advises that they should be reserved for potential buyers who have shown a strong consideration of submitting an offer.
In-person viewings will also have to adhere to the social distancing guidelines. It is also advised that homeowners leave the property whenever the potential buyer comes to view. The house should also be cleaned afterwards, advice on how to disinfect after a traffic flow of people can be found from many places such as serviced apartments Reading.
Two significant changes are that open houses are no longer allowed, and estate agents shouldn’t drive potential buyers to view a property. The latter could be a problem if you’re looking for property away from your home area and have no means to get there.
If you had planned to move before the pandemic, you can now move as removal companies are back to work. It is advisable that you do most of the packing yourself. On the day of moving, ensure that the movers wash their hands and that you open the doors for them so that they don’t have to touch such surfaces.
Moving should be delayed for homes where a member has coronavirus symptoms or is in isolation.
The mortgage market is slowly resuming normalcy, with lenders offering more and better products. That means that individuals with smaller deposits can now access better products than they would one or two months ago.
How About House Prices?
You’d need to look into a crystal ball to tell the future of house prices. The government has an official measure for house prices, and it can, therefore, tell the direction they are headed.
With the pandemic, the government has suspended the measure, citing a lack of reliable data to generate figures due to the minimal house moves between March and April. Now that the market has resumed fully, there is still no data due to the small sample size.
Nationwide, which keeps its customers’ data (mortgage purchases alone and no cash buyers), states that house prices dropped 1.7% in May compared to April, which represented the largest drop in 11 years. However, the sample size for this study was smaller than usual and is therefore difficult to tell whether the measure was accurate and reliable.