Until last week the residential property market was completely stalled due to the Coronavirus lockdown and whilst the immediate future remains uncertain, there are some reasons for positivity.
In the early weeks of the crisis some lenders removed products with high loan to value ratio whilst they paused to assess the long term risks. However, the number of available products is now increasing again. Nationwide and Halifax have re-launched their 85% LTV products. This shows increased confidence in the market and hopefully other lenders will follow.
The market was strong earlier in the year
For the first three months of 2020 the Brexit bounce was very evident. After three years of uncertainty the future seemed to be more stable.
Data shows that immediately after the lockdown announcement visits to property websites fell sharply but they have now increased.
Shortly after lockdown we wrote to all our clients who had ongoing conveyancing transactions to ask them whether they wanted us to continue or place the transaction on hold. Against our expectation the overwhelming majority told us to carry on. We now have a large number of transactions at or near the point of exchange with clients ready to exchange and complete.
Outdated working practices are changing… fast!
In a crisis situation, changes that would normally have taken years happen in days. We are now carrying out a large number of our client meetings by Zoom and we anticipate that many clients will wish to use this as an alternative to personal visits or telephone conversations. Estate Agents are getting more used to desktop and drive by valuations. More of our staff are working at home and to some extent, that is likely to continue.
Increased interest in rural properties
There is some evidence that those who have experienced the benefits of home working may no longer wish to live in or just outside big cities, preferring instead to move out to the sticks and travel in to work less frequently.
Large construction firms are building
Many of the large house builders are reopening building sites. These companies will have carried out detailed analysis and if they considered that a property recession was imminent, they would have placed building work on hold just as they did in 2008.
Our commercial property department has stayed very busy. Leases, sales, purchases etc are proceeding and completing. This suggests that confidence has not been damaged in the same way as it has been in previous recessions.
All previous recessions have been caused by reckless lending leading to hyper-inflation in the housing market, funds drying up and prices plummeting. That is not the situation now.
It would be optimistic to think that it will be business as usual as soon as the lockdown has ended but there is every reason to think there will be an early recovery.