How to Buy Property Post-Lockdown
There is no doubt that the Coronavirus pandemic has had a colossal impact on every aspect of our lives. The impact from the global pandemic reaches further than just domestic too as we see the ‘new normal’ scaling across the world in order to get the economy and normal life up and moving once again.
It’s safe to say that the property market has also seen a huge dip in sales, enquiries and contract exchanging too but light is being shone at the end of the tunnel as estate agents across the UK reopened on the 13th May 2020.
But, how should you be approaching buying a house post lockdown? Here are our top 3 tips:
Show Your Enthusiasm
Although there is a lot of speculation at the minute around the idea that the market is very unsaturated, there is additional evidence that contradict this theory.
It is very unclear at the minute as to what the property market will be doing in terms of house prices as a result of the global pandemic, however there are a multitude of reasons as to why a decrease in the housing market may not be taking place:
- Backlog of buyers due to Brexit
- Lockdown proving why certain houses are no longer suitable.
- Break down in relationships/employment
At the back end of 2019 there was quite a significant decrease in the property market as people held off buying due to the long awaited Brexit.
People’s uncertainty of buying a property in the midst of Brexit meant that the market almost hit a halt during the winter months of 2019.
This first began to become apparent in the autumn of 2018; when Marc Carney said that a no-deal Brexit could result in a huge cut in house prices, by up to a third of their value.
Due to this statement, as well as much more speculation from economy experts, people began holding off on the sale and purchase of property.
Now we have left the EU and are slowly but surely coming out of the lockdown period, a huge backlog of these buyers and sellers are now eager and ready to play the property roulette once more!
The number of people eager to buy and sell will also be topped with those who have struggled in their homes during this lockdown period.
If you have found the lockdown a breeze, then you’re probably in a suitable home, in a suitable location with the right company for you.
However, a lot of people will not have found it quite as easy.
Meaning it is anticipated that an increase in people buying and selling simply as a result of lockdown.
An alternative way that lockdown will be contributing to increased interest in sales and buying new property, will be due to the increase in unemployment.
During the coronavirus outbreak, 600,000 have been taken off payroll in between March and May 2020, this figure would not therefore be taking into consideration those that are self employed.
These figures are higher than have been for years, meaning those who have taken on mortgages, may need to reconsider.
Since China began to loosen their lockdown restrictions at the end of March, the increase in divorce and separation rates have also increased.
For the property market this means:
- Increase in sales of houses as a separate couple may no longer be able to afford a large mortgage single handedly.
- Increase in buying properties and separated couples seek to find a new home without their spouse.
Therefore there are many reasons as to why, if you are serious about purchasing a property, you need to sell yourself as a serious contender.
Estate agents may turn a blind eye to you if they feel you are not serious about a sale or purchase as they have to go through a much more lengthy process for those who are potential buyers or sellers.
Even arranging a house viewing will be increasingly difficult as the wishes of the vendor and or tenant will need to be matched as well as the social distancing rules that have been sent by the government as we proceed into phase 4 of the easing lockdown rules.
Therefore it is essential that you are clear about what you’re wanting in a potential property as well as your position.
Being straightforward and upfront with the estate agent will put you in a really good position for when you find a property you are interested in.
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Acquaint Yourself with the Community
Most people will know that buying a house goes a lot further than brick and mortar, as the community your new purchase will be situated in is just as important for most.
Before lockdown you could quite easily get the a general understand for a community just by going local venues and speaking with your potential neighbours-to-be.
However, now, it is more difficult than ever to do this as the closure of amenities stay that way for a little while longer.
Nevertheless, there are a few other alternative methods you can do in order to get to know the surrounding area, what other people’s opinions are of the area and also form your own opinion.
Go for a walk and talk to the locals.
If you are not a keen walker, then alternatively you can drive, but go out and find a local, get their opinion and find out their experiences on living there.
It is essential that you respect the wishes of other people in the area however as some may not feel comfortable talking to you beyond a polite ‘hello’.
It is also a great time to find out about your neighbours, since everyone is guaranteed to be home anyway.
Have a quick knock on their door, ask them what you want to know, but again be respectful as some may be isolation or shielding – a phone call will be just as informative, provided that the person is willing to share their phone number.
What might also be a good idea too, if you yourself do not feel comfortable starting conversation with strangers, is to join online community groups.
There has been an array of these spring up all over social media, initially created to make people feel less lonely during the lockdown, however, have blossomed into a lovely virtual community in replacement for all of the prior outdoor social activity one undertook on a daily basis.
Instagram has become a good online resource, on there you can follow hashtags to see localities as there has been a recent surge in these types of posts.
It may also be a good idea to ask locals, estate agents and do some online digging on noise levels near your new home.
The coronavirus has seen a decrease in road congestion from 50-70% to just 16% over the last few months in some areas.
So, what you may see and hear now, may not be a realistic representation of the real noise pollution in that area.
Save your Money
Another step that you may have found easier during the lockdown is to save a little spare cash.
Pubs and restaurants closed as well as local amenities, meaning that we have had to make do with a board game and home cooked meals!
Therefore if you have been able to save it is a good idea to increase your house deposit if you are able to do so, for no other reason than some banks are increasing their down payments before accepting your loan.
Some banks have even said that down payments need to be as high as 15% in order to be granted the loan.
This is particularly common for purchases in cities such as London and Manchester.
This is especially important if you are a first time buyer or are self-employed as banks are quite reluctant to lend out money due to the current state of the economy to these two categories.
You might find that they are asking more questions and taking a little more precaution when investigating your financial state and how the pandemic will have affected you.
So, is it completely legal for a sale to go through now in the UK?
Since lockdown was first officially announced at the end of March 2020, proceeding with the sale of a house became illegal.
This was due to a magnitude of reasons such as estate agents were not allowed to work, you couldn’t visit a household or any person that was not within your ‘bubble’, and valuations of properties were brought to an abrupt halt.
Although guidelines suggested that only urgent transactions (those that, if they didn’t proceed, could potentially make someone homeless) should go ahead.
However, as we move into phase 3 of lifting the lockdown rules, we see more and more restrictions in this area being lifted.
Buying, selling, renting homes and commercial properties are all legal to go through, under the condition that all of the properties are based in the UK and providing that everyone involved in the transaction is abiding by the social distancing rules set out by the government.
The relaxation of some lockdown rules also means:
- Some estate agents will be allowed to reopen for face to face meetings
- In person viewings
- Remortgaging taking place
- All aspects of a physical house move are now taking place
- Removal companies are now in full operation
Depending on the estate agent or buyer or seller of a property, the way in which they conduct viewing etc. will be different to the individual or the estate agent.
Some estate agents may have no problems, however some may only be taking virtual viewing for the first viewing and then if a second viewing is requested, then doing the second viewing in person, this may reduce footfall.
Alternatively if there is a vulnerable person who is shielding, this may mean that the viewing process is postponed or unable to proceed simply to err on the side of caution.
Remortgaging a property, in some instances, may already have been feasible due to desktop valuations which were taking place throughout the lockdown period.
This will now be easier as in person valuations are now going ahead.
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What about Scotland, Wales or Northern ireland?
The governments of Scotland, Wales and northern Ireland have decided not to take lead from Westminster meaning that the temporary freeze on the property market is still in place.
Therefore it is unlikely that the sale of properties will be going ahead except for very rare circumstances.
What about the building of new homes?
The government has issued guidelines in regards to the production of new homes.
Once again, builders and construction sites have been given the ‘good to go’ giving that they follow social distancing rules and work remotely.
In the effort to get the new homes property market moving again, the government has also issued a new ‘safe working charter‘ to restart the process in order to mitigate any potential long term damage to the housing market.
Have house prices been affected due to lockdown?
Sellers may still well have a very fixed price in their head of what their house is worth and buyers may have a very fixed price of what they would be willing to spend on a property.
That being said, the market is not yet in the same position as what it was before the covid-19 crisis hit and therefore this causes concern for property market experts.
It has been predicted that people will be more likely to negotiate house prices and try to get more for their money after the lockdown which could lead to a little bit of a stalemate further up the property ladder, as those with a house to sell may be reluctant to accept a low offer if they, in turn can’t get a lower offer accepted on their next property and so on.
This could mean that house prices will decrease slightly, but the UK will not know officially until the market gets moving once more.
Although covid-19 and lockdown has changed the way in which house sales are being processed and completed, this does not mean you should be put off buying a home post- lockdown.
Although previously banks may have been quite reluctant to lend as much money if they were lending money out at all.
However, now that the economy has started rolling again, more and more banks will begin lending once again.
As long as you follow our three tips (as listed above) and also be aware of the changes to the market, you should be well on your way to finding (and moving) into your new home or commercial property.