With the next review of Lockdown in Scotland due on 18th June, and the First Minister due to speak around moving to phase 2 and lifting restrictions, it’s very tempting to make predictions about the future. Forecasting is a notoriously difficult task – you might even say it’s a fool’s errand – but us humans are hard-wired to think about what’s around the corner and how we can plan for it.
The expectation is that lockdown restrictions are going to be eased and it’s comforting that estate agents have been earmarked in recommendations for which businesses should be allowed to re-open first: a welcome acknowledgement that moving home is an important part of life in Fife and Scotland.
Enquiries from buyers are also on the rise at estate agents up and down the country, while the property portals are also reporting increased numbers of visitors. This means sentiment and appetite, two of the property market’s key drivers, are firmly in place.
As estate agents we are naturally optimistic and the current willingness of lenders to lend and buyers to buy suggests there is much to be positive about. But with a crystal ball firmly in hand and a finger to the wind, let’s explore some possible outcomes and how they might affect your plans to sell your home.
SCENARIO 1: LOCKDOWN EXTENDED
It looks fairly unlikely that a full lockdown will continue, but for the sake of argument, here is what you can do if it does, or if any restrictions that remain in place prevent an immediate return to business as usual.
If you don’t have a Home Report, or unless your home is exempt (new build property), you will need to wait until inspections are allowed again before you can put your property on the market. Although we have been advised by the Scottish Government that in exceptional circumstances, we can put a property on the market.
We still need to be at a social distance so you would need to arrange a virtual valuation. This is where you take us on a video tour of your home via your smartphone. We can then advise on price and give suggestions on presentation. Marketing your property in this way is not ideal because your sale will be based on neither the estate agent nor buyer having visited, which could leave a number of questions around room measurements, descriptions, light levels and even maintenance issues. Although it’s not an impossible situation and we have sold properties this way already! One buyer in particular saw our virtual viewing online, went around and looked in the window and made an offer. SOLD! Just like that. The seller was delighted.
If any restrictions remain around photographers visiting homes, you’ll need to take the photos of your property. While buyers will make some allowances for non-professional photography, the pictures do nonetheless need to be good enough to attract enquiries. You can find lots of information about staging advice in other articles on our blog, but essentially rooms need to be tidy, the camera needs to be held horizontally, and all interior lights should be turned on. We can give you further guidance.
We can arrange virtual viewings by group calls using various apps like Whatsapp, Zoom, skype and even do live broadcasts to all our social media channels. Again, some of our sales are being agreed through virtual viewings, although generally subject to a physical viewing taking place before exchange of contracts. That does introduce an unusual variable, but some buyers may already be familiar with the location of your property and be happy to commit.
Solicitors are still working during lockdown and some lenders are willing to issue mortgage offers on some types of property without a visit from a valuer. That means your sale could advance quite significantly through an extended lockdown period.
SCENARIO 2: A BOUNCE BACK
Very simply, with activity levels returning to somewhere near before lockdown which they seem to be according to Zoopla and our website analytics the market is showing very good signs of recovery from the uncertainties over Brexit and the General Election, sentiment is excellent among buyers and property values are beginning to lift. There is a remarkable sense of get-up-and-go from every quarter that was cut suddenly short, but whose spirits weren’t quelled.
If we’re experiencing an instant bounce, we’d suggest acting immediately to get your property on the market. Many people will want to get back on track with their lives and plans which could well result in photographers, surveyors and estate agents being overwhelmed with requests to get properties on the market. So, if a we are to open back up on 18th June, get those appointments booked in as soon as you can.
That possibility also makes now the time to deal with any outstanding issues that might detract from your home’s saleability: the decor, the clutter, the kerb appeal, the cleaning. You can find other articles on our blog to help you prepare your property for sale, or you can arrange a virtual tour with us now so we can advise you on how to be ready when the moment comes.
Discussions between the housing minister and estate agency representatives have focused on how to allow viewings while keeping social distancing and other safety measures in place. If you are at home at the time of a viewing you could be required to wait outside, while potential buyers could be asked to avoid touching surfaces and to attend alone or as a couple, with any children left at home. Agents are likely to be instructed to carry wipes and disinfectant, while everyone attending will probably have to wear masks and gloves. This is what we are preparing for. Safety is key here!
SCENARIO 3: SHORT-TERM UNCERTAINTY
As yet, we simply don’t know the full effect of lockdown on the UK economy and how that will translate into employment figures, buyer sentiment or whether lenders will tighten their criteria to protect themselves.
It’s eminently possible that we may be in for a short pause: a few modelling exercises have predicted a short, sharp, shock to the economy for a few months after lockdown, with a recovery in the final quarter of 2020.
Much is made of negative press commentary and, while gloomy headlines can affect the market, sentiment among buyers is also driven by the behaviour of lenders: if mortgages are readily available and not overly restrictive around deposits or other security, that may be enough to sustain a sufficient level of enthusiasm among buyers. It is in the DNA of Britons to own a home!
However, uncertainty could see a slight dip in prices. We aren’t experiencing that yet and if anything, it’s still offers over the home report value we are getting. Just as property owners can take advantage of a seller’s market, buyers understandably look to do the same when conditions are different. That’s why you need a great negotiator to represent you. The prospect of a short-term dip could also be seen as an opportunity among first-time-buyers to get on the property ladder and with the Scottish Government’s First Home Fund giving every first time buyer up to £25,000 towards buying their first home this will certainly help.
A few months isn’t enough for a large drop, and you may find a single-digit dip can be absorbed by the equity in your existing property or recouped on your purchase. If you are buying a property that is more expensive than your current home, a short-term dip could work in your favour as the gap decreases between your selling price and buying price.
SCENARIO 4: A LONGER ECONOMIC DOWNTURN
The dreaded “R” word! We are now into full-on, long-term speculation that requires a look beyond an unconfirmed period of short-term uncertainty. Given that we won’t even know the effects of that until the autumn, it’s unwise to dwell too long on something that may very well never happen, so we’ll take just a very short look.
Generally, the immediate effect of a recession on the property market is that lenders and first-time-buyers press pause, which starts a ripple effect. The beginning is usually the worst as everyone takes a deep breath and braces themselves, but people’s lives do have a habit of moving forward regardless of economic conditions.
It is far from impossible to sell your property in a recession, but it calls for determination and realism. Most moves are people trading up, which makes a larger fall in house prices very profitable, as long as you can see beyond the sale price of your existing home. That can be a challenge, but if the overall numbers work, you may be able to make a move that was otherwise impossible and more than worth your while.
Let’s leave that discussion there for now and see what this week’s announcement brings. In a week or two we’ll all know the next chapter of Covid-19 and how our daily lives will be allowed to progress. Whatever that brings for the property market, we are here to give you straightforward advice and support in helping you make the right decisions about your move.
Remember don’t panic I realise this is an unprecedented situation, but we’ve never had this level of economic support from the government and I suspect we are going to land a lot softer than the doom mongers are predicting. They’re only doing this because it sells newspapers!
The key is to get the best advice based on facts and that’s what we are here for. You’re welcome to contact us any time.
