As estate agents, valuers, surveyors and more return to work, the housing market is reviving. The latest predictions have given a timeframe for the sector’s full recovery…
The cogs of the UK housing market began turning again last week as the government set out its new rules. This meant house moves could get back underway, while people hoping to buy or sell now have more options to do so. People can view properties, lenders can have them valued and surveyors can visit homes again.
The reopening is of course subject to a number of guidelines. People must still practise social distancing and additional hygiene measures. For estate agents, letting agents and similar businesses going back to the office, several rules now apply to ensure everyone’s safety.
This activity had largely not “stopped” during the coronavirus outbreak, though. Many agents were working from home, while property viewings were happening virtually. Many lenders were also carrying out “desktop valuations”, and people could still apply for mortgages online. As more people have adapted to using more technology and digital options, the industry has found ways to continue.
While the easing of lockdown on the housing market is good news, it will be a gradual process. The Royal Institute for Chartered Surveyors (Rics) argues that the industry would benefit from a stamp duty holiday to give it a further boost.
In its latest residential market survey, Rics revealed its predictions for recovery. Contributors to the survey said that they expected property sales to “rebound to their previous levels in around nine months”, when looking at the mean average. For the median average, the expectation was closer to six months.
The survey also broached the topic of a stamp duty break. While around 80% of respondents said they had seen some buyers or sellers pulling out because of coronavirus, 62% said such a tax break could help the market. This would in effect encourage buyers and sellers while leaving house prices unaffected.
John Williams of Brennan Ayre O’Neill estate agents commented: “The market has proved resilient to the current lockdown with the vast majority of buyers/sellers keen to progress transactions as soon as government restrictions allow. The key therefore is to achieve a safe and workable easing of the lockdown.”
The figure of nine months was taken before the government eased lockdown restrictions for the housing market. Therefore, as former Rics residential chairman Jeremy Leaf points out, the next survey “is likely to be quite different”.
Nine months for the mortgage market
Between 8th April and 3rd May, 467 UK mortgage brokers were asked about their recovery expectations for the sector in the Mortgage Lender Benchmark study. Like in the Rics survey, respondents came up with the ‘magic number nine’ as the number of months until recovery.
Around 77% of brokers are confident lending levels will return to pre-COVID-19 levels within nine months. A more optimistic 51% said this could happen within six months.
While initially the mortgage market retracted many of its products back in March, it relaunched new ones relatively quickly. Many lenders reduced LTVs because of the difficulty of carrying out valuations. However, product numbers have been creeping back up and people have been progressing with their mortgage applications behind the scenes.
Anthony Rose, director at LDNfinance, said: “Mortgage lenders, on the whole, have responded really well to events and maintained their willingness to lend as much as could have been hoped for.
“If we are able to get estate agents functioning properly again over the next few weeks, and surveyors are able to value properties, then I think we can all be very hopeful of a quick and pronounced bounce back.”
There have been similarities drawn between the current situation and the financial crisis of 2008/2009. However, Rose believes the situation is very different.
“Mortgage lenders themselves seem in a much better position to lead the recovery in the housing market,” he added.