I think we can all agree that the past week has been extraordinary, something not seen in our lifetime. There has been confusion, a little bit of panic, a fair amount of denial and some hysteria. We have all had to rapidly adjust to a new way of living as we look to curb this virus pandemic. When you throw into a market, panic, confusion and a bit of hysteria, that is always going to have a big impact whether or not on the Stock Market or the property market. Our estimates suggest that 50% of the buyer pool for property has withdrawn or stepped back from the market this week, at least temporarily. Speaking with many buyers, it appears that some are a bit unsure and would prefer to adopt a ‘wait and see’ approach, whereas some other buyers are unfortunately in businesses and economic sectors that are already feeling the economic strain as the virus news worsens……
On the flip side, that still leaves 50% of the buyer pool that remains relatively active, focused and committed to buying a property even at this time. I, therefore, need to make this abundantly clear – the property market is very much open for business. Offers are still coming in, sales are being agreed even this week (see below), buyers are exchanging contracts on existing purchases and there is no downward pressure on prices at the present time, although there will inevitably be some softening of confidence if this crisis drags on. Viewing appointments are, of course for the main part, going to be on hold during the lockdown period but they are being forward booked. From those discussions with buyers who are actively in the market right now, there is an awareness that we are in for some tough times but, unlike previous economic hits, they are taking a longer term view ie they are not buying on today’s headlines but are instead focused on the next five to ten years. Most people are very much aware that over time, property is a stable investment and provides a home. Look across the history of two world Wars, the Great Depression, the OPEC crisis, the recessions of 1982 and the early 1990s, the ERM crisis, the September 11 Attacks, the Global Financial Crisis of 2008 and the long-term trend of property values is relentlessly upward. Covid-19 is a most unwelcome new addition to that list but it seems that many people are seeing it as a short-term interruption to a housing market that was performing strongly until very recently.
It is important to remember that this crisis will pass and that we will come through this together. Governments around the world are pushing unprecedented stimulus into the economy and will be going to extraordinary lengths to support us through this time to provide the confidence that markets will not collapse. We also know that interest rates will be locked at near zero for the foreseeable future. Yes, there will be periods of lockdown when viewings are not possible. Market activity will be stop/start for months to come but there is a strong underlying demand. People are now spending much more time at home. In many instances this will encourage them to move shortly.
It is also likely people will have a lot of time on their hands – they will be on Rightmove and our website for hours. It is a far from ideal situation but we will continue to try hard on your behalf and we are working on some new initiatives to bring into play as soon as the lockdown ends. More of that in due course.
In the meantime, Kim, Judith, Jason, Georgie, Tamsin and I send you and your families all best wishes over the next few weeks.
Martyn
