We can learn from the lessons of lockdown
FROM talking to many Newbury estate and letting agents, it might surprise you that new enquiries from homebuyers, tenants, landlords and sellers have been at record levels since lockdown was lifted from the property market in mid-May.
There are a number of reasons for this. Firstly we had the pent-up demand for property from the Boris Bounce in January and February. Next, many people were planning to move this spring yet were prevented doing so because of lockdown, and finally, surprisingly, an advance wave of home movers seeking to bring their plans forward because of a fear of a second Covid-19 wave.
Data from Yomdel, the live chat and telephone answering service for a quarter of UK estate and letting agents, can track information from across the UK on what is happening. Each week, they are dealing with thousands of enquiries from sellers, buyers, landlords and tenants.
They have created a rolling weekly average of those enquiries for the UK for the 62 weeks before the country went into lockdown.
Then they compared that average with specific time frames, namely the 10 weeks of the run-up to the General
Election, the eight weeks of postBoris Bounce in January and February 2020, the weeks of lockdown in March, April and early May and then, from mid-May, the post lockdown. Enquiries in letting and estate agencies are the beating heart of the property market – the ECG machine of the estate and letting agency. Of course, house price data has its place and is lauded by the national press as the bellwether of the property market, yet it takes six to nine months for the effects of what is happening today to show in those house price indexes, whilst these enquiries are what is happening now. In the eight weeks up to the General Election, every metric was down. Next, the post-Boris Bounce saw house seller and buyer leads increase yet tenant enquiries were low (hardly any change from the run-up to the election).
Everything dipped during lockdown as expected, yet the post-lockdown metrics are amazing, with a 164-percent rise in buyer enquiries.
So, what is happening in the property market? Well, there is plenty of activity, yet that doesn’t mean everything is back to normal. Enquiries are an important metric, yet another way to judge the health of the property market is to look at the number of property transactions. Now the Land Registry data isn’t quite as exhilarating, yet it is less volatile.
Nationally, it shows property transactions were at their lowest level since its records began in April 2005. The seasonally adjusted estimate of UK residential property transactions in April and May 2020 was 90,210, 53.4 per cent lower than the 193,500 transactions of April and May 2019. Again though, this was because of the restrictions on moving during Covid19.
When I look at the number of properties for sale in Newbury, 87 have come on to the property market in the last 14 days alone, and of those, nine are already sold subject to contract.
So, what of the future of the postlockdown housing market?
While a stern recession seems almost guaranteed, a housing market crash is not. Many newspapers are predicting property values to fall in 2020, then rise from the ashes in 2021. The fact is, nobody knows. The property market is driven a lot by sentiment.
Buying a home is not like buying stocks and shares – it’s a home to live in. Property always has, and always will be, a long-term investment.
Many of you reading this, especially potential first-time buyers, have been putting off buying your first home because of Brexit, now its Covid-19, and in a few years, it will be something else.
There will always be ‘something else’ and you could get to your 50s and 60s still renting, waiting for the ‘next thing’ to pass before you buy.
Nobody knows what the months or years ahead will bring, yet what I do know is, people will always need a place to live.
Please let me know your thoughts. Tell us your experiences as a landlord or homeowner, tenant or buyer so we can all learn from each other.