The UK property market has come to a halt because of the coronavirus outbreak. There are lots of reasons for this, but will house prices be affected by the slowdown?
Nobody can tell you the future. Where will we be in a year, or ten years from now? These thoughts keep me awake every single night as I am wondering what the future holds for all my loved ones, my friends, and my family. What will happen to my job? People are losing their jobs in every corner of the world. It all looks like a scenario for a film or like some old dream, a nightmare.
Just try to go back, just a few weeks, and imagine someone telling you that in a month schools will be shut down everywhere, all public gatherings will be canceled, hundreds of millions of people around the globe will lose their jobs, and that all the countries of the world will unite against one common enemy.
In other words, we woke up one day and found ourselves in the middle of a global pandemic in which we can’t have any face-to-face interactions because they can negate efforts to halt the spread of the coronavirus. This is why the entire planet just stands still (like in that movie, but it is not “the day”). And just like most aspects of life across the country, the UK property market also entered a state of stasis.
Is There a Need to Pull Out of Transactions?
The world is going to change after this. For the biggest part of the western world right now, the scale of the coronavirus crisis looks like 9/11 or the 2008 financial crisis – events. The economy of this world, healthcare, and politics will have to change, but life will go on no matter what.
This is why the Ministry of Housing stated in its new guidance, “There is no need to pull out of transactions”, but they also said that we all need to stay at our homes to protect our families and ourselves from this novel virus. This brings us to one of the problems. People can’t come and see the properties that are for sale.
The uncertainties about the future, the fear, bad news that are coming from all over the world are causing havoc in property markets around the world.
Prices Going Down?
Because of the lockdown buyers can’t go out and visit the properties they would like to buy and sellers can’t sell their properties. This is not a functioning market and nobody can tell how long will it take for the economy to recover. However, prices are holding for now, even though there are certain reports of prices going down in a couple of regions.
Most inner London areas saw an increase in the number of properties with asking-price cuts of more than 10% in the first half of March when compared to the same period of the last year. This was more pronounced in the richest boroughs like Kensington and Chelsea. They are both famed throughout the country for their high prices and high cost of living.
The Uncertainties That Are Shaping Our Future
COVID-19 has changed the course of the history of the world. It has changed global life. We are going to have more cleaning of shared surfaces, we are going to have restrictions on how many people can be in an elevator at the same time, Taxi vehicles and airplanes are going to have to clean their vehicles more often, we are going to start seeing more ultraviolet light in indoor environments, and we are going to see copper used on shared surfaces. In the end, social distancing, masks, and protective gloves are going to become our reality in the long run.
However, the business will find their way to work. I don’t know about other industries but the property market is already finding its way from the sellers to the buyers. The entire sector is going through a modernizing phase and to quote a famous novelist Diana Gabaldon, "Nothing is lost... Just changed."
People Are Not Buying Yet, But They Are Searching For New Houses More Than Ever!
People are scared of this virus and it’s normal to see sales dropping all around the world. However, it’s also normal to see a higher number of people searching online for their new homes. Buying and selling are maybe “on hold” but that doesn’t mean that people will stop searching for their new homes if they had already had plans to buy a new home before all this started unfolding.
Bindi Norwell, a Real Estate Institute chief executive from New Zealand said that there are agents who are using this time to better connect with their customers and some are even organizing virtual tours and virtual auctions online. So, the business continued moving forward but slower.
Can This Crisis Also Present Opportunity
People will try to stay away from each other, restaurants will have to reshape their businesses, but this also can be perceived as an opportunity. This crisis could make us build more sophisticated technology, get out of that “Cold War” mentality and start building a better world, better appreciate the outdoors and life’s other simple pleasures.
No one can tell you what will come, but the one thing we do know is that some kind of change is coming. This crisis will make us change our society, healthcare, the economy, our lifestyles, and more. The only constant here is change.