Ask An Expert: Post-Lockdown Buying And Selling Process
The property freeze has been lifted but the sector remains in a strange no-mans land, caught between the extremes of pre-lockdown working and total market lockdown. Social distancing responsibilities now drive the way the sector operates which could forever change the way we buy and sell homes.
As the market tentatively reopens, industry stakeholders have spent time releasing advice on how to stay safe whilst resuming physical viewings, opening office space and meeting buyers and vendors face to face.
Sentiment suggests that the market is bursting back into life with new instructions and sales agreed increasing by over 100 per cent respectively week-on-week. Although the current market is still only around 40 per cent of the 2020 average, it is clear that the market is ready to start moving with gusto.
However, when the UK was told to ‘stay at home’ for so many weeks, can buyers, sellers and industry stakeholders just switch off that embedded fear and immediately start operating as before?
Paula Higgins, chief executive of HomeOwners Alliance, has taken the time to discuss the sentiment of buyers and sellers, feelings about physical viewings post-lockdown, and the way the recent changes to the property market may permanently change the home buying and selling process.
What is the overall sentiment with buyers? Are they cautious or determined to move in the current climate?
Our research found that 1.8million were not moving because of the pandemic (polling just one week into lockdown). The latest news will be a relief for those who have had their moves put on ice; and for those whose current living arrangement is not fit for purpose especially as our fight against the virus is far from over.
With some changes in working patterns set to be made permanent – going into an office occasionally rather than at the same time every day, people’s housing needs may very well change. People may start to value gardens and home offices over a hassle-free commute to work and this could have an impact on property valuations over the coming months and years.
Current chains seem to be holding – with buyers asking for discounts of 5-10%. In relation to new sales being agreed, buyers are trying to negotiate discounts of 20% but these are not being accepted by the sellers. Buyers are moving because they are determined to but are apprehensive to pay pre-lockdown prices. What we don’t know is what prices will do in the coming months ahead as the economic impact of the coronavirus kicks in.
Are there any demographics particularly struggling at present? Economic reports suggest young people are most likely to lose their jobs – are we seeing fewer first-time buyers at the moment?
It’s too early to tell from our data, but the situation doesn’t look good for first time buyers, as lenders are asking for higher deposits of 15%. Hopefully this won’t last, and for those first time buyers who can get over the deposit hurdle and keep their job, the historically ultra-low-interest rate should help them. We have also seen a rise in people searching for shared ownership and help to buy advice on our site.
Are people happy to physically view homes or are people content with expressing an interest after a remote viewing?
It’s early days but it looks like virtual viewings are a good first filter for people nervous about visiting homes. There are many obvious advantages to virtual viewings and this could be the death of open houses. Virtual viewings via WhatsApp or FaceTime can be a better and more honest account than the promotional videos that you can find on the property portals. But if a property whets the appetite – then nothing beats a physical viewing. We have set out information on viewing a house post-lockdown. See – https://hoa.org.uk/2020/05/viewing-a-house-during-lockdown/
With this new normal, estate agents and sellers need to ensure they are fulfilling their obligations by providing any material information about the property upfront. We have been encouraging our sellers to complete upfront the Property Information Form (TA6), get their paperwork in order and instruct a conveyancer early in order to speed up the process.
Are buyers happy to let property stakeholders like surveyors, estate agents and buyers into their homes at present?
We are finding it all depends on their personal circumstances, for instance if they are in a vulnerable group or they are desperate to move. Where possible, inspections and visits should take place by appointment only, and the seller can leave the home or stay in another room. There is detailed guidance for professionals working in other people’s homes.
We are delighted to see the joint effort by all parts of the property industry (estate agents, conveyancers, lenders, surveyors) have come together to produce integrated guidance on how home moves can happen safely. It can be incredibly frustrating and confusing for home buyers and sellers to be on the receiving end of conflicting advice from their property advisers and it doesn’t reflect well on the industry as a whole. https://hoa.org.uk/2020/03/buying-home-coronavirus/
How will the recent crisis change the home buying and selling process?
As we start to create a new normal for home buying and selling there is a real opportunity to use technology to bring in improvements and speed up the process. We’re recommending home movers seek out conveyancing firms with digital platforms that allow them to load up and share information as well as track their case online.
Buyers will want to do a great deal more of their research upfront before deciding to view a property in person. As a result we should see more information shared by estate agents and vendors before a viewing is booked.