The construction industry represents such a high proportion of the UK's GDP that it was no surprise that it was one of the last sectors the Government put into lockdown and one of the first to emerge.
The easing of restrictions has allowed contractors to return to site. All of our developments are active again, albeit at a slightly slower pace due to the new distancing requirements.
The most immediate effect will be to unlock the pipeline of transactions - some 373,000 according to property portal Zoopla - allowing committed buyers and sellers to be able to complete. However, commentators suggest that the total number of transactions in 2020 is still likely to be half that of recent years.
Initial data suggests that activity rose sharply after the Government reopened the housing market. Demand has seen an immediate bounce back to pre-crisis levels.
Property portal Rightmove saw over five million prospective buyers visiting the site within 24 hours after restrictions were lifted. This is in line with the numbers before the pandemic and is 4% higher than the same time last year. Rental demand has returned, with enquiries at their highest level since September last year.
Rival site Zoopla also reported a surge in demand, with searches for London up 80% and agents in the capital confirming higher levels of enquiries.
It could be that some buyers review their housing needs after their experience of lockdown. Miles Shipside of Rightmove:
High demand could lead to a boost in values for properties that offer inspiring home-working options. But on the other hand, the extra value for a property being close to a popular commuter route may diminish if working from home becomes the new norm. We have seen some early signs of people enquiring more about out-of-city areas so it will be interesting to see if this leads to a change in where people choose to buy now the market has been unlocked.”
With a 90% drop in new house listings over the last two months, the various property indexes have been unable to collate meaningful price data. Looking forward is uncertain. Some commentators suggest a fall of 10% is likely, given how closely property prices are linked to the general economy. Others are more optimistic, citing the structural supply/demand imbalance and the continued willingness of lenders to advance mortgages. Whilst employment levels will inevitably impact the demand side of that equation, major house builders had already cut back well before the pandemic (UK house building in sharp decline).
The Royal Institute of Chartered Surveyors' market report, used by the Bank of England, suggest a drop in prices of 4% should be expected.
Within our own niche - city centre investment properties - we remain reasonably optimistic. Any fall in the demand for owner occupied properties is matched by an almost equal rise in demand for rentals. The number of our website visitors and enquiries is substantially higher than a month ago, though below last years levels.