Relaxing of rules in the UK regarding viewing, selling and buying homes in Corona lockdown, could trigger a flurry of activity.
Mired in COVID-19 and with Brexit still to come, there is a big question mark over the UK property market. But this week the government announced changes to its rules around Coronavirus lockdown, one of which, that viewing property and meeting estate agents are valid reasons to leave your home. The announcement is expected to prop up the failing UK property market, but for how long, is the question.
Mark Parkinson, Director of buying consultancy Middleton Advisors, weighs in with his opinion.
'The news has brought a flurry of activity from buyers in the the last couple of days. The question on all the agents’ lips is how long it will last, as most think it is a result of pent up energy in the market after six weeks of inactivity, rather than an indicator of a buoyant market going forward. We will know more in about six weeks time.
I think now could be a good time to sell for this reason, if you are committed to selling within the next 12 months. Many vendors in London are already withdrawing their properties in the hope they will get more next year, assuming we have a clear horizon by that time. We are still doing deals in London but it is becoming increasingly difficult to find a good house at the right price.
The ‘Brexit effect' is already factored into the market in London. The bigger issue this year will be that foreign home buyers and investors are very unlikely to come to London over the summer, as they will likely face a month in quarantine (two weeks in the UK then two weeks when they go home).
The reception room of Chester Terrace on sale for £12.5m (c) Arlington Residential
The Prime Central London market has fallen roughly 20 percent since the 2014 peak, slightly recovered in the first couple of months this year with the ‘Boris bounce’ but we expect it to remain flat at best, for prime properties. Conversely, barring economic armageddon, it is difficult to see it falling more than 5 percent to 10 percent, as the compound fall from the 2014 peak is a historic fall not seen for 30-40 years.
But in terms of investing in its truest sense - looking for yield and capital growth - that is a tricky thing to find in London property at the best of times, let alone now. There are opportunities with the larger developers in some of the new towers like One Blackfriars and 18 Blackfriars. But yield might be problematic as so many of them have recently come on to the rental market as professional ‘Airbnbers’ are coming unstuck with no bookings.
In terms of investing in your own home or second home in London, it is still possible during lockdown - we did two deals in Prime Central London last week. Ultimately the market is and will continue to be populated by people who need to move although those who are more discretionary will likely put things off for a year, which will provide some opportunity for well-advised buyers in the meantime.'