London’s property market is expected to slow dramatically as the capital locks in to tackle the spread of the coronavirus, with agents reporting a dramatic drop in home visits and new listings drying up.
The trend is expected to continue with the latest advice from the government for people to practice social distancing and with growing uncertainty about employment.
Until the coronavirus response became more drastic, the London property market was the strongest since before the Brexit referendum, with asking prices showing the largest annual increase since May 2016.
Coronavirus slows market recovery
Home sales that were already underway before this weekend were mostly continuing in London. However, figures from the real estate sector have said that the events of the past few days have dampened momentum for the foreseeable future.
“The vast majority of our sales – over 90% – went through Thursday, March 12th. However, since Friday buyers and sellers have been much more cautious,” said Paul Cosgrove, director of Finlay real estate agents. Brewer. .
“The full outcome of the coronavirus is not yet fully understood by anyone in the real estate industry, but in the same way as Brexit, only highly motivated buyers and sellers want to continue operating in this unfamiliar environment.”
Patrick Alvarado, director of central London chief agent Nicolas van Patrick, said that although new viewings have “dried up quite a bit over the past week”, the offers that were on offer are still ongoing.
It was a similar story from Jeremy Leaf, a North London real estate agent and former residential chairman of the Royal Institution of Chartered Surveyors. He said: “Views are probably down 50% from what you’d expect for this time of year, rather than the 25% we saw a week ago, but that doesn’t necessarily mean that buyers and sellers do not get along.
“For example, we managed to get four contract exchanges on Thursday and Friday of last week. All parties asked the “what if” question about completion, but all decided to continue nonetheless. “
However, there have been several reports of expensive international transactions that failed over the weekend, with overseas customers canceling trips or canceling sales.
“We have heard of people who have pulled out of trading due to the collapse of the stock market,” Mr. Alvarado said. “A large penthouse was with another agent for £ 50million, but the buyer just pulled out because on paper he took a huge hit.”
Is London still a “safe haven”?
Other leading London agents who deal with overseas clients said their international buyers still viewed the London property as a “safe haven” with some reporting blind deals and sales made after video visits only.
Tim Macpherson, Head of Residential Sales in London at Carter Jonas, said: “Although activity has slowed considerably, our sales pipeline is holding up well. And while stocks and equity investments have taken a hit, property is often a safe haven.
“As it stands, we have seen the number of viewings here in Mayfair cut by around half, mainly due to clients’ understandable choice to work from home or not to travel to the UK.
“However, many overseas buyers send UK representatives or candidates to see for them, and we are holding more Facetime meetings and visits to keep the communication going. We’ve even had blind auctions, showing that motivated buyers are doing what they can to get ahead.
As people have been forced to stay at home or banned from traveling, the number of virtual viewings has increased, a trend that is expected to continue even after the passage of the Covid-19 epidemic.
Video views the method of buying a house of the future
Jamie Read, director of London real estate agent Tavistock Bow, said the real estate industry’s response to the pandemic will have a lasting impact on how home sales are conducted in the future.
“This is a really interesting challenge that the real estate market has to adapt to and could pave the way for the future of the industry in the years to come,” he said.
“As a traditionally face-to-face business style, this may well have a lasting impact on how we handle viewings into the indefinite future, embracing technology and creative techniques that meet the ever-changing needs of consumers. “