The immediate prospects for the local property market post-lockdown appear positive, but long-term uncertainty remains over stricter lending criteria and the prospects for a wider economic recovery.
A range of restrictions on the housing market were put in place as part of the Executive’s wider regulations to tackle the coronavirus pandemic in March, among which was a rule stipulating that house moves could only take place if ‘absolutely necessary’.
This month saw the partial lifting of restrictions, and the gradual return to a ‘new normal’ with sellers and their agents adhering to regulations intended to reduce any transmission of the virus, including the mandatory wearing of face-masks and gloves and social distanced property viewings.
One West Belfast house-hunter, Mairead O’Hare, told Property Pulse that the experience of socially-distanced viewings has been “weird”
“It’s definitely a weird experience and very different from pre-Covid times. When you arrive you are asked to wear gloves and a face-mask, and the estate agent doing the viewing will be dressed the same way. The owners are asked to vacate the premises for at least a few hours.”
“Once you enter the house you are on your own rather than being guided by the agent, and this has advantages and disadvantages. You can explore the whole house freely, but at the same time you don’t have any immediate feedback to questions that might arise. You don’t get to ask the owners about amenities, schools, traffic, things like that which are actually crucial.”
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Estate agents in response to the new working environment have moved the bulk of their transactions and customer interactions online, a pattern that may continue even in the wake of the pandemic as companies introduce greater technological innovations. Colin Moran, Director of Property People described the impact of the new regulations on the industry:
“There is no doubt that whatever industry you look at Covid has changed the way we conduct business and interact with our customers,” he said.
“For estate and letting agents, we have had to do risk assessments concerning viewings and all customer-based interactions. It is now commonplace that properties on line have 360-degree photos and video walkthroughs. These allow the customer to get a good feel for the property without having to take time out to attend a viewing. Similarly, Estate agents are using technology to provide customers with desktop valuations. They may help vendors decide to list their property or hold off.”
The wider economic impact of the lockdown on the industry remains in question: British figures from the property website Zoopla show that more than 400,000 home sales were delayed or cancelled due to the crisis, with an estimated value of approximately £82 billion, a pattern that has been replicated locally in the North. Yet the easing of restrictions has seen house sales booming, with Zoopla’s research finding that the first two weeks of sales have been up on the pre-lockdown period and that, while prices have dipped, they remain higher than this time last year. According to Colin the property search website PropertyPal experienced “unprecedented” levels of interest in recent weeks, “suggesting that the public are not only looking at properties but actively seeking to view”.
This bounce back in pent-up demand has mirrored optimistic predictions of a V-shaped recovery from the coronavirus-triggered recession, yet experts have issued cautionary advice, as the central issue that has emerged is the decision of banks and other lenders to put stricter lending criteria in place. This is a move that reflects wider uncertainty over the long-term effects of the virus and lockdown, effects that are predicted to impact later in the year and into 2021, as the UK government is predicted to take gradual yet stringent steps to cut back on government support for both affected businesses and displaced workers.
“For me, one of the most apparent impacts of the pandemic on the local housing market can be seen clearly in the lack of availability of available finance from high street lenders,” said Colin.
“Lending criteria has undoubtedly tightened, and most lenders require a 15 and even 20% deposit on a residential mortgage. Banks are wary of the economy and are ensuring that they have a higher than usual built-in tolerance to their new loans with the higher deposit.”
Ultimately, one of the main factors contributing to the post-Corona is “human behaviour”.
“From what I have seen so far, the signs are positive. As the economy reopens, the spending habits of the public are returning. People are showing that as soon as they have the opportunity to do so,” said Colin.
“Even with social distancing in place, shoppers are back to the high street, customers are returning to businesses, and in time, punters will be back on bar stools. People will return to the new normal, and the wheels of the economy will hopefully continue to turn once more.”