As capital-based chartered surveyors, London is our focus. We have watched the Covid crisis unfold and we’ve seen how the virus is affecting the city’s property market. Here’s a run-down of the current situation, plus some broad predictions around what’ll be happening after the current, second national lockdown.
People are still buying homes
We’re still seeing plenty of people determined to buy places to live and invest in London property despite the virus. Some set the buying process going before the first lockdown, then completed their purchase as soon as it ended and things eased a little.
Higher levels of estate agency website traffic
It looks like estate agency websites have been recording higher levels of traffic than the same time last year. As the first lockdown lifted the number of viewings increased dramatically. And this reveals something a few people might not have predicted – despite the virus, property prices in London aren’t simply dropping wholesale. They’re actually increasing for properties that facilitate working from home or have a decent-sized outdoor space.
Outside the capital, properties in rural areas are getting more buyer attention simply because they are away from the city. Locked-down London felt very strange. Some buyers feel the risk of more lockdowns, maybe many lockdowns into the foreseeable future will make living in the city nowhere near as much fun as it is when the place is fully open for business, crowded, exciting, and vibrant.
When you can’t practically view a place in person, you want the video tour to be more comprehensive and detailed than ever before.As you can imagine, video viewings have gone through the roof because of the virus and as a result, their quality is improving fast.
As well as video tours there are other kinds of highly professional virtual tours taking place. Agencies are digitising and viewing homes from multiple angles, and building in extra functionality including pinpoint-accurate measurements. Today’s self-guided 3D walk-throughs can be created with a single scan, and include amazing quality photos, schematic floor plans, videos, even sound. When physical visits are not possible, or when buyers are overseas and unable to visit, this new tech is property-buyer gold dust.
The Guardian’s report on property rentals in the capital
The Guardian has analysed the Covid property rentals scene and come up with a detailed picture of what’s been happening.
It looks like London’s private rental incomes have plummeted for the second quarter in a row, with some areas experiencing a sharp slump of as much as 34% compared to 2019. The rental market has struggled to recover since the first lockdown, with the average monthly rent for a room in London falling to £725 between July and September, down 7% from the same time in 2019. On the other hand, non-London rents rose an average of 2%.
The boom in working from home has seen more potential homeowners and renters moving out of London and other British cities in favour of the suburbs and small towns as well as rural areas. In addition to being more pleasant to live in during lockdowns, out-of-city properties are often very good value for money, bigger as well as cheaper.
Apparently, the demand for city rental homes with gardens, patios and balconies doubled through summer 2020, and at the same time demand for shared housing dropped right back. One-person rentals proved the most popular of all being, of course, the safest. Another dramatic sea-change reveals landlords taking more interest in tenants’ job security than ever before. Secure incomes are even more desirable than high rental incomes at the moment. And that means younger people, as well as those on furlough, are finding it harder to rent homes.
How about recovery? The experts say it’s unlikely to happen soon. Perhaps big cities like London will never quite regain the same level of appeal for renters.
Forbes on London property sale prices
According to Forbes, the capital’s property sales scene is looking pretty healthy, and the most expensive homes are still achieving almost their full price. London saw 56 deals on super-prime $12.9 million-plus properties in the first eight months of this year, despite the lockdown. In 2019 we saw 57 in total for the entire year.
At the moment these luxury homes are selling for around 5% less than the asking price, up from 92% in Q1 2020. This is the lowest price fall since Q1 2017, and it is being laid at the feet of ultra-low interest rates plus more property owners and buyers delaying selling or buying until the future becomes clearer.
Forbes also notes how demand for homes with outside space has increased, making places like Notting Hill, Belgravia and Hampstead busier than ever as regards selling and buying. Prices remain ‘robust’ and relatively steady, with ‘single-digit percentage discounts’ the norm.
RICS on surveying in Covid times
Obviously, we can’t go out surveying during the second lockdown. This is what our governing body, RICS, says about the current situation.