How is coronavirus impacting London property? Sales under offer still going through as agents look to video viewings
The London property market is expected to slow down significantly as the capital goes into lockdown to combat the spread of coronavirus, with agents reporting a dramatic drop in the number of home viewings and new listings drying up.
The trend is likely to continue with the latest Government advice for people to practice social distancing, and with growing uncertainty over employment.
Until the coronavirus response became more drastic, the London property market was the strongest it had been since before the Brexit referendum, with asking prices showing the biggest annual increase since May 2016.
Coronavirus putting dampener on market recovery
Home sales that were already in progress before this weekend were mostly still going ahead in London. However, property industry figures said the events of the past few days have put a dampener on momentum for the foreseeable future.
“The vast majority of our sales viewings — more than 90 per cent — went ahead up until Thursday last, March 12. However, since Friday both buyers and sellers are being much more cautious,” said Paul Cosgrove, director at estate agents Finlay Brewer.
“The full outcome of coronavirus is not fully understood by anyone in the property industry as of yet, but in a similar way to Brexit, only very motivated buyers and sellers are keen to continue operating in this unknown environment.”
Patrick Alvarado, director of prime central London agent Nicolas van Patrick, said that while new viewings have “pretty much dried up over the past week” deals that were under offer are still going through.
It was a similar story from Jeremy Leaf, north London estate agent and a former Royal Institution of Chartered Surveyors residential chairman. He said: “Viewings are probably down 50 per cent on what you would expect for this time of year, rather than the 25 per cent we saw a week ago, but that doesn’t necessarily mean that buyers and sellers are not getting on with moving.
“For instance, we managed to secure four exchanges of contract on Thursday and Friday of last week. All parties asked the ‘what if’ question about completion but all decided to proceed nonetheless.”
However, there were several reports of big-ticket international transactions falling through over the weekend, with overseas clients cancelling trips or backing out of sales.
“We have heard of people pulling out of deals because of the stock market collapse,” said Mr Alvarado. “One large penthouse was on with another agent for £50 million but the buyer has just pulled out because on paper he has taken a huge hit.”
London still a ‘safe haven’?
Other prime London agents who deal with overseas clients said their international buyers still view London property as a “safe haven”, with some reporting blind bids and sales achieved after video tours alone.
Tim Macpherson, head of London residential sales at Carter Jonas said: “While activity has slowed significantly, our pipeline of sales is holding well. And while stocks and shares investments have taken a blow, property is often a safe haven.
“As it stands, we have witnessed viewing numbers here in Mayfair reduce by approximately half, primarily due to clients understandably choosing to work from home, or not travelling to the UK.
“However, many overseas purchasers are sending UK representatives or nominees to view in their place, and we are arranging more Facetime meetings and viewings to maintain communication. We have even had some blind bids, demonstrating that motivated buyers are doing what they can to move forward.”
As people were forced to stay at home or banned from travelling there was a rise in the number of virtual viewings, a trend which is likely to continue even after the Covid-19 epidemic passes.
Video viewings the home buying method of the future
Jamie Read, director of London estate agent Tavistock Bow said the property industry’s response to the pandemic will have a lasting impact on how home sales are conducted in future.
“This is a really interesting challenge for the property market to adapt to, and may pave the way for how the future of the industry will look in years to come,” he said.
“As a traditionally face-to-face business style, it may well have a lasting impact on how we operate viewings for the indefinite future, embracing technology and creative techniques that suit ever-changing consumer needs.”
Contributed by Homes&Property.co.uk