Sorry to be the one to tell you this…
"The most important question, how much is it, I would like a realistic price, the present situation taken into account, this will eliminate any interest I have if the figure is not realistic."
This is an actual email I received recently at what became the end of an email chain discussing a particular property we are currently selling. This individual had previously enquired about the property when I had informed him that it was under offer. However, like so many deals agreed pre lockdown, the sale fell through as the previous buyer worked in retail and so, understandably had to withdraw from the purchase. As such, like a good agent I had reached out to all the previously interested parties to see if there was any appetite to buy.
Peter (a pseudonym) had responded with various questions, I had shared with him the virtual tour, and we were closing in on a viewing when this charming prose landed in my inbox. But how to respond? Fortunately, the property in question belongs to me, so I am not in danger of upsetting the vendor. But even if it was not my house, how can one accurately answer such a question… to come up with a “realistic figure”, or rather in real terms what is a “realistic figure” for Peter?
A little over a week after the property market effectively reopened, the stories are starting to flood in. Buyers it would seem, have convinced themselves that its 2008 all over, and that vendors like myself are all in a panic, with bailiff’s at the door ready to repossess our homes if we don’t sell to them for a song…
However, in real terms things could not be more different to the 2008 “credit crunch”. As a result of the Coronavirus, we have the lowest interest rates in modern history, lenders are currently offering mortgage holidays, a scheme which is apparently to be extended for another 3 months. The banks lending has effectively been underwritten by the state, and we come at this after 3 years or more of slow, single digit house price growth.
On this one small flat alone since the easing up of lockdown a week ago, I have had nine virtual tours, four enquiries, one physical viewing, another booked in and a further enquiry as I write this very afternoon. This is in sharp contrast to 7 months ago, when enquiries were looking pretty slim on the ground. It feels to me, as both the agent and the vendor that if anything the “present situation” demands that I Increase the price rather than decrease it… I jest of course, but only just!
Peter like so many buyers out there has somewhat misjudged the situation, confusing a lack of transactions with a lack of demand. The property market did not come to a grinding halt in March because of some structural economic disorder which was putting buyers off, rather they stopped buying because they couldn’t move, physically. This particular hurdle has now been removed and they are moving, lots of them. Yet many vendors, particularly those selling their family home, understandably don’t want viewings to take place given the health risks. This has created a stock deficit.
Speaking with the various brokers within The London Broker, it is clear that the buyers are out and out in good numbers too, keen to make the move many might have hoped to have achieved over the last 3 months. Of course, with agents adopting virtual tours and video tours more today than they ever have before, it might feel as though buyers aren’t out and about, but in real terms they are.
In the last 30 days, over 380 individuals have visited 10 of our properties via our virtual tours. In the last 7 days, 59 individuals have visited the same 10 properties, with at least a third of them visiting twice. Now of course we should not confuse these analytics with actual physical viewings or indeed offers, but in the absence of any definitive transactional data, and when combined with the information we hear from our brokers, it is hard to paint anything other than an image of a phoenix rising from the ashes of a market destroyed by the virus… perhaps I over state it, indeed I almost certainly do, but you get my point. Britain it would seem wants to get moving.
Of course, one thing we are missing is the data coming out of the mortgage industry, an industry which may yet put some breaks on the recovery. With the furlough scheme extended to October, there is the distinct possibility that we have yet to realise exactly what the economic cost of this pandemic will be and how it may impact on the housing sector.
However the emerging economic environment notwithstanding, speaking with one of our vendors over the weekend it became clear, that whilst the aim remains to sell, if they have to postpone their purchase for a year or so and rent instead then they will. This is a position I am entirely sympathetic with as I too am under pressure to move, but not at any cost, least of all at significant cost to my personal capital, which for the most part is held in my properties. The truth for many, particularly those who bought in 2013-2016, is that we bought in a very different environment to that in which we are selling. In real terms prices have come off from those heady days before the stamp duty changes and Brexit. As a result many of us will already be feeling somewhat miffed (to put it mildly) that we have not seen better returns from our property, and in real terms many of us will simply not sell, especially given we are not under pressure to do so.
The facts are that we are busy, we are busy with viewings where we can be, we are busy with enquiries and qualifying buyers, we are busy taking on listings and shooting virtual tours. The market is moving, buyers are looking and vendors will come to the market in larger numbers as the days and weeks pass.
As for any buyers out their like Peter looking to take advantage of a situation, they have all but misunderstood… I am sorry to be the one to tell you this, but for you the price just went up!