Property market open again – but home movers will face long delays

The property market may have been given the Government’s green light to reopen this week but eager property buyers and sellers still face huge delays, experts warn. Estate agents reported a surge in inquiries and offers being made on Wednesday, mostly from those whose deals were cut off by lockdown. However, the post-freeze market will take some time to return to normal. Sellers are being asked to agree to big discounts. Buyers are in a long queue for valuations because of the backlog that built up while surveyors were banned from entering people’s homes.

Alex Lawton, who is in the process of buying a home, said his surveyor had told him he faced a wait of more than a month before an inspection could be carried out. “Even with the new guidance this week, it’s going to be mid to late June before they can start viewing houses,” he said.

Access to mortgages has tightened, further slowing the market. Banks have restricted mortgages to buyers with large deposits. In these cases, valuations can be carried out remotely. Aaron Strutt of Trinity Financial, a mortgage broker, said some banks would have tens of thousands of existing cases to deal with before they could offer deals to new customers.

The lockdown rules effectively barred first-time buyers from the market, removing a crucial cog in the machine. They typically buy with a smaller deposit, meaning fewer mortgages are available for them and valuations require a physical property inspection. Wealthier buyers, too, could face delays, as pricier properties must have physical valuations. Anyone stuck in a chain with any of these buyers will also be affected.

Another hurdle to recovery is that buyers who rush to make offers now could be buying at the top of the market, putting them at risk of getting into negative equity. House price forecasts for this year range from falls of 5pc from Savills, an estate agency, to 23pc from Deutsche Bank.

A poll by the Royal Institution of Chartered Surveyors (Rics), a trade body, found that the market would not return to pre-Covid levels for nine months. Four out of five agents saw both buyers and sellers pulling out of transactions in April, Rics added. Capital Economics, a research firm, predicted that at least a quarter of sales now in progress would be cancelled – partly because many of the paused transactions would involve some of the 7.5 million people now furloughed.

There are already reports of big discounts being demanded by some buyers. One first-time buyer has demanded a 10pc discount on a flat in London, which is at the bottom of a nine-property chain. “Buying at a price that was set before the biggest earnings shock in history is not on,” he said, adding that he would walk away if the vendor did not accept the cut. “I’m not confident about London house prices.”

There is also concern that property hunting may put both vendors and

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buyers at a higher risk of coming into contact with the virus. Many estate agents were surprised by the sudden restarting of the property market on Wednesday and are still in the process of drawing up new safety protocols for viewings. These will include wearing masks and gloves, sellers cleaning between viewings, leaving all lights on and doors open and limiting viewers to two at a time.

Yet sellers may still feel uneasy letting strangers into their homes for viewings and market activity is likely to remain linked to the prevalence of the virus. Hansen Lu of Capital Economics said: “Even among those who are unscathed economically, lockdown behaviour will take time to change. Many won’t want home viewings while virus deaths are high.”

Government guidance says it may be necessary to pause house moves again to limit the spread of the virus.

Jeremy Leaf, a north London estate agent, said: “Buyers are going to fall into two camps. We have some people who are already saying ‘ Where do I sign?’. Others say: ‘I can’t see my son or my grandson, why would I want to see an estate agent?’ ”