The Property Market Gets Back to Work - Black Brick Property
With COVID-19 infection rates across the UK in decline, the first efforts are underway to restart parts of the economy placed into deep-freeze since March, not least the property market. As of May 13th, the government has allowed estate agents in England to reopen, house viewings to go ahead, removal firms to restart operations and conveyancing to resume.
“We’re out viewing properties again and have restarted searches on behalf of our clients,” says Camilla Dell, Managing Partner at Black Brick. “We expect most activity in the near-term to be among domestic buyers, given the reluctance of many people to travel, and plans in the UK for a 14-day quarantine, but there is no shortage of international investors looking at potentially attractively priced London property.”
Certainly, the expectation is for near-term price falls. According to figures from Knight Frank, prices in prime central London fell 0.3% between March and April, on a limited number of transactions. Across the UK as a whole, prices rose 0.7% in April, according to Nationwide.
Knight Frank has updated its forecast, now predicting that prices will fall -5% in prime central London this year – compared with flat prices it was forecasting until recently – while Savills is now predicting 5-10% price falls.
“This might sound counterintuitive, but that is really positive,” says Dell. “Looking at the market with rose-tinted glasses will only lead to Mexican stand-offs, with sellers clinging to unrealistic views of prices and refusing to transact.”
In the next few months, most transactions will be needs-based, and driven by the domestic market. But potential buyers who are deciding to sit on their hands until September – in the hope that, by then, things will be beginning to return to normal – could be making a mistake, says Black Brick Partner Caspar Harvard-Walls. “Certainly, there’s likely to be more stock, but there is going to be huge competition. Potential buyers would do well to start their searches now.”
International investors are not letting travel restrictions hold them back. “Sterling weakness and continued low prices means that dollar-based buyers’ money is going further than ever – with discounts of more than 40% compared to the market’s peak in 2014,” says Dell, noting that Black Brick is working on a number of investment searches ranging from £10 million to £250 million.
“The embrace of new technologies such as virtual tours means that prospective buyers don’t need to visit properties for an initial viewing,” says Dell. “These are going to become fixtures of the property market even after the pandemic,” she adds.
“However, we need to be realistic – very few buyers will transact and purchase a property without actually having viewed it in person. Exceptions may be for off-plan and lower-value new build, or for an exceptionally good deal, but these are very much exceptions. What virtual tours do allow however is for buyers to get a really good feel for a property, making their visits to London far more productive when they do get here.”
For the full June 2020 Market Update from BlackBrick follow the link: https://www.black-brick.com/expertise/market-update
For further information contact:
Camilla Dell, Managing Partner
Black Brick Property Solutions LLP
+44 (0) 20 3141 9860
+44 (0) 7887 827 176