2020 has been a tough year for pretty much everyone so far. With all that has happened up until this point, a question we hear often from prospective sellers and buyers is ‘when and how do I sell my home now?’
Lets take it back a few months to January and February, what a lot of us now consider the highlight of the year. Brexit had finally come to a long-awaited conclusion and life was about to become some what normal again. What many people did not realise however is that those two months were record breaking for the property industry. Rightmove and Zoopla were receiving their highest ever visits of all time peaking at 152 million visits to Rightmove! Property prices seemed to be rising and properties were selling quickly. So, what can we expect from the market once the threat of the virus is on the decline and an ounce of normality begins to set in?
I must start but explaining, we are in no way comparing anything we have experienced in the past to where we are now. However, previous records suggest that post-crisis, whether this be financial or health related, there is always a boom in the market shortly after. This is due to the following reasons.
Firstly, the main reason there is a boom after a crisis is due to the backlog of people that postpone their move due to unforeseen circumstances. The majority of sellers prefer to wait for some sort of certainty within the market before taking the necessary steps to marketing. This is demonstrated on Rightmove where in the last eight weeks there have been 42 new properties added to the market in CR5. If you compare this to the exact same dates in 2019, there were 148 new properties. This is also seen in CR3 with 47 new properties since March this year compared to 163 in 2019, RH1 with 72 compared to 273 and RH2 with 32 new properties compared to 135. This shows a staggering backlog of sellers who have withheld their properties from the market who will all consider selling once COVID-19 has abated.
Now you may ask why a backlog of sellers will help you. Surely there is more competition? Yes, you are correct, but with a backlog of sellers also comes a backlog of buyers who have withheld their search until there is more certainty. If your property appeals to first time buyers, there will be an abundance looking to take advantage of the lower mortgage rates. If your property appeals more to people upsizing or downsizing, there will also be an increased number due to the knock-on effect from the first time buyers.
Following on from this, as slightly touched on above, another reason for a for a boom post crisis is due to the decreased mortgage rates. This is extremely encouraging for buyers and we recommend everyone to take advantage of this time. Low interest rates are also especially attractive to first time buyers as they are not yet affiliated with any lenders and are not tied into existing mortgages. First time buyers are the foundation of the majority of sales in the UK as we rely on them to begin the chain. Ultimately with more first-time buyers looking to move the rest of the market will feel a positive ripple effect and more chains will get to exchange and completion.
We understand many people have been hugely affected, and we sincerely hope if you fall into this category you manage to recover as quickly and efficiently as possible. Having said that, the final reason why I believe the market will boom in the next couple of weeks is due to the fact many other individuals would have had the opportunity to save during this period. We as a nation are renowned for spending our disposable income in pubs, restaurants and on holidays. So, with these indulgences being off limits for the past 8 weeks, many have been almost forced to save more money. Again, this will likely benefit first time buyers that either live at home or are paying low rent, but it does have positive onwards effect.
The point I am trying to portray in this article is that once life begins to return to some sort of normality, things will be okay. There will always be a need for people to buy and sell property and the property market will always be prominent. For most, the situation we are currently in has inadvertently made property buying and selling far more affordable and financially beneficial. There will be hurdles along the way, but we will adapt, continue to follow the guidelines and persevere.
Stay Alert and Stay Safe.
Written by Luke Porter – Director at Woodcote Estate Agents