So, in the UK, we are officially in the 2nd government-mandated lockdown, but what does that actually mean for the London property market? As a property agent who works with both buyers and sellers looking to invest or sell in London, it gives me great insight on what both sides need to navigate the ever-changing London property market, and today I’ll be covering what the latest lockdown may mean to buyers and sellers.
The UK government recently announced the 2nd national shutdown which will take place from 5th November for 4 weeks. Highlights of the lockdown are that all bars, restaurants and non-essential shops will have to close. It also prohibits or limits meeting with people who are not family members as well as to stay indoors, except for specific purposes such as exercise and essential shopping, as well as going to work if your job is deemed essential and you cannot work from home.
The point of the second lockdown is to permit schools, colleges and universities to stay open and to prevent overwhelming the NHS.
What are the differences between the first and second UK lockdown?
One of the major differences from this lockdown as compared to the others is that the property industry has been permitted to keep working. This means that we can continue to conduct viewings, all of the services associated with making an offer and conveyancing towards the purchase can continue to occur and that people can continue to move. This is obviously good news for us as the last lockdown restricted all of those activities for nearly 2 months.
How London property agents can support buyers, renters, and sellers during the lockdown
Specifically for me and my clients, it really means business as usual, however, we have implemented a few changes to make the process as smooth and safe as possible for buyers, sellers, and renters in the London property market. As promised from the first lockdown, all listings coming on the market would have 3D virtual walkthroughs which we now have in place (here’s an example of one of my recent listings which you can walk through from the comfort of your own home). These virtual walkthroughs mean that potential buyers or renters can experience the home virtually before coming to see it. This reduces the number of “tyre kickers” as we say so that only qualified buyers and renters are coming through the door.
At the viewings themselves, we wear face masks at all times and always carry hand sanitiser, as well as have ample time after the viewings to clean and ensure the space is safe for the property owner to return if they are still in residence. We limit the amount of time spent indoors and I share the features of a room then step out and let the applicants view it for themselves without us all being in that space. Also, as I work from home and have all the equipment and resources I need, it allows me to be fully productive throughout.
What will happen to the London property market during the second lockdown?
Obviously, even with the market staying open, we anticipate that the new lockdown will dampen the market, though we are seeing major discrepancies across different price points and different areas of the capital. Make sure to check out my recent article on the London Property Market Update where I talk about which areas are selling and which are not.
Should I sell my London home now?
For many, this latest update raises the question of whether to sell or not. As always, the answer is: it depends. It depends on your unique circumstances and reasons for selling. If you are selling to “test the market”, you likely won’t get the results you’re looking for as buyers are highly price sensitive and will determine value. If they don’t see the value, they won’t even call. However, if you are motivated to sell and are willing to price it to the market, what I can tell you is that 50% of my business comes from representing buyers and I can honestly say that I am as busy as I’ve ever been on this side with both foreign and domestic buyers looking to purchase in the capital. The key here is that they are expecting value and many are looking for discounts from the asking price. But in some cases and in some areas, they are not and are happy to pay a fair asking price.
If we buy now, will we beat the Stamp Duty Holiday deadline?
Another key question being raised is whether you will be able to complete your purchase by the end of the stamp duty holiday currently scheduled to expire on 31 March 2021. And the answer is that it will be tight. We are seeing current sales take between 2-4 months to complete due to delays with local searches, mortgage lenders, surveyors, and the conveyancing process. With the Christmas break added to the mix, it puts a huge amount of pressure on timescales.
Some in the industry predict that the stamp duty may be extended as the Government has made it clear that it is doing everything in its power to support the housing market. Industry bodies are already lobbying the Government for an extension, and I am sure this is something already being looked at. However, even if an extension is granted, we don’t think it will be announced soon as the government will want people to continue to act with a sense of urgency.
So in summary if you are a seller that is considering selling, while it is still a buyers market as there are fewer buyers relative to the amount of stock, there are definitely indications that buyers are ready, willing and able to transact. For buyers, it’s a great time to buy given your ability to negotiate significant savings in some cases and take advantage of a £15K stamp duty savings for any purchases over £500K. For the American buyers and other foreign buyers, the exchange rate to the pound is still favourable, and the government are looking to bring in the 2% additional stamp duty in April 2021 which will add an extra cost to your investment, so now really is the best time to beat that increase.
I hope this article has been helpful in giving you the latest London property market update and how the lockdown may affect the London market. If you want to know more or have specific questions, don’t hesitate to leave me a message in the comments section below or get in touch. You can also find me on Facebook and Instagram where I have daily posts about the property market.