If you’re wondering what will happen to the housing market post-lockdown, you’re not alone. Pretty much everyone with even a passing interest in property is pondering the same question, so we’re going to give you our predictions in today’s post.
Now, before we get started, there’s got to be the obvious caveat applied here. Despite being part of East London’s property market since way back in 1908, we, like everyone else, can only offer our opinion on what we think will happen. Anyone who claims to know for certain what will transpire at the end of this period is either fooling themselves or trying to fool you.
So, with the crystal ball dusted off, let’s get to it...
Prices will dip, and then bounce back
The property headlines haven’t made great reading of late, with plenty of speculation about house prices taking centre stage. With the property market almost shutting down overnight, house price indices have been left without the necessary data required to compile their regular reports, fuelling fearful forecasting further still.
Interest, however, has remained high throughout the lockdown to date. Property portals are seeing significant increases in traffic and individual estate agents are reporting an uptick in registrations. Naturally, transactions are way down at the moment, but the signals we’re receiving are a million miles from the doomsday predictions being made in the media.
Without the help of house price indices, making a solid assessment on the state of the short-term market is difficult to say the least, but a drop of some sort should be expected. The housing market largely mirrors the wider economy, so a lot will depend on the timescale of the lockdown and the possibility of further restrictions being made should we see a second peak.
One solid indicator we can draw on is past performance. The UK housing market is incredibly resilient, surviving many recessions and depressions over the years, and we see no reason why this crisis will be any different. As we stand now, we expect the market to dip this year with a slight rally beginning in 2021.
Prime property will hit the ‘value for money’ sweet spot
In most cases, a drop in house prices is exaggerated at the top end of the market. Those who have been following along carefully will know that the capital’s prime market hasn’t had the best of times over the last few years, and any further dip brought about by this pandemic could push these homes into becoming an irresistible opportunity for those who can afford them.
The Brexit process hit the prime market particularly hard, pushing many ‘dream home’ prices downwards. Although there was a definite turnaround in fortunes earlier this year, COVID-19 looks set to reverse that once again, sending these seven- and eight-figure homes south once again.
Cash buyers will seize the chance to buy up this valuable real estate at bargain basement prices (relatively speaking!), so we expect to see activity increase in this sector after the initial downturn.
Overseas buyers will help keep the market buoyant
Much maligned in the past, overseas buyers will be welcomed with open arms over the coming period of instability. Not only will we see an increase in interest for the prime residential market sector mentioned above, but there could also be further investment into the UK housing market generally from Asia and the Middle East.
Their input will be encouraged, and possibly incentivised further, by the government who will be looking for ways to bolster the economy during this difficult time. Investment in new home developments and the resulting boost to the construction sector and the taxable income received could be the kickstart our economy needs in order to get itself back on track.
Suburbs will continue to gain popularity
Zones 1 & 2 have been out of reach financially for most for a long time, but we may have still hankered after a home in the heart of our incredible capital city just a few short months ago. Not anymore.
Interest in rural areas is up exponentially as people seek out more space and solitude, but that comes at a price, too. There is, however, a happy medium: the suburbs. Places such as our parish, Wanstead, offer house hunters the best of both worlds, so we expect to see a rise in interest here and in surrounding areas such as West Essex.
Larger family homes with outdoor spaces abound here, so for those looking to get out from Zone 3, Wanstead and beyond has plenty of attractive properties to offer.
More space for remote working
While gardens will be an increasingly important factor for homeowners moving forward, so too will space for home offices. Lockdown has proved that working from home can, ahem, work, so it’s a trend that is likely to continue past the pandemic.
Many employers are already weighing up the option of allowing more staff members to work from home on a regular basis, even post-lockdown, so the possibility of more time out of the office will encourage homeowners to seek out more space.
With this in mind, properties with spare bedrooms and other spaces where a home office can be created will be in high demand.
Home improvements demand will soar
The last point feeds into this one, as more and more people will look to extend their homes to accommodate areas for remote working. There will also, no doubt, be a percentage of homeowners who may have wanted to enter the market prior to the pandemic who now decide to improve their homes rather than move.
Whatever the reason, we feel sure that home improvements will play a big part when we move out of lockdown. Builders and architects will benefit, but so too will neighbouring properties, as the value of homes locally will rise with the improvements being made and the desirability of the area as a whole.
Viewings will change
To be honest, this has already happened, but we think it could have a continued impact as we move out of lockdown and back to some sort of normality. Agents, Petty’s included, have had to adapt the way they market the homes they list, offering virtual viewings, as opposed to physical ones, for the duration of the lockdown.
While this change has been brought about by the need for social distancing, the response we’ve had from both sellers and buyers leads us to believe that virtual viewing could well be here to stay. It offers greater flexibility and can be extremely beneficial for those who are looking to move into an area from further afield.
Naturally, there’s no comparison to seeing a property ‘in the flesh’, but buyers can get a real sense of whether or not they’d like to take their interest further after visiting a home virtually. This, in turn, makes life easier for the seller, with fewer physical visits disrupting their day-to-day lives, all of which points towards virtual viewings being more than just a lockdown novelty.
How many of these predictions actually come to pass remains to be seen, but one thing remains certain: our faith in the UK property market. If you’d like to discuss anything property related with us, please do reach out.
Although our offices are currently closed, we are still very much open for business and would love to help you make your next move. Give us a call!