Following the easing of lockdown restrictions on the 13th May, the housing market in England has resumed activity in earnest.
Even those of us who work in the industry every day could not say for sure how the market would react upon ‘reopening’, but two months in, we are gaining some clarity.
Despite some doom and gloom predictions of a housing market crash, the housing market in Lancashire is buoyant. Whilst observing the relevant government guidelines, the Valuation team at Lea Hough are undertaking record numbers of pre-purchase surveys for buyers, and the agents we speak to on a day to day basis are reporting high levels of buyer enquiries.
National headlines tell a story of falling house prices, but that certainly doesn’t seem to be the case in Lancashire, and anecdotal evidence suggests that prices locally are in fact rising beyond pre-lockdown levels.
There is often a disconnect between the property market ‘down south’ and the property market in our home county of Lancashire, and that seems to be the case right now. Whilst prices are ‘cooling off’ in London, there seems to be a perception that property in Lancashire is comparatively affordable, and many buyers are happy to pay full asking price, if not more, for their dream home.
Perhaps this level of activity should not have come as a surprise. During the lockdown period, the housing market was effectively mothballed, but many families and individuals still had a need to move home and this ‘pent-up’ demand is being released all at once.
The lockdown period has also been a time for furloughed workers to stay at home and reflect, and many seem to have reflected on the fact that their property no longer meets their needs! Respondents to the latest RICS Residential Market Survey felt that demand is likely to increase in the future for properties with gardens/outside space, whilst tower blocks and properties with no outside space are felt likely to become less desirable.
Many first-time buyers who have been cooped up at home with their parents during lockdown have decided that now is the time to enter the housing market. Once major difficulty for first-time buyers, however, is the withdrawal of high loan-to-value products from the mortgage market. Saving up a deposit is already a major challenge for many first-time buyers and with most lenders now requiring at least a 15% deposit, getting onto the housing ladder may seem even further out of grasp for some.
The recent announcement by the Chancellor of a ‘Stamp Duty Holiday’ has been well received by the industry. Market activity may well increase further as more buyers are tempted by the prospect of lesser moving costs.
Despite all this, the future is uncertain. Day by day, more firms across the country are cutting jobs, the eventual end of the furlough scheme is growing closer and the ongoing issue of Brexit adds further uncertainty. The economy could be in for a rough ride, and only time will tell whether this surge in activity will continue or curtail.
Blog written by James Leech, Chartered Valuation Surveyor
