One year ago, we crept blinking out of the darkness of our first lockdown. Never before had we experienced such uncertainty, even fear of the unknown. Previous pandemics were a distant memory for those of the older generation, but nobody today remembers the Spanish flu.
Fast forward twelve months and here we are, anticipating the end of lockdown 3. On 17th May we can stay with friends and family, go to the pub, eat out at a restaurant without having to pile on layer after layer to stay warm.
What has this meant to the housing market? Last year everything was put on hold until lockdown was over and we were allowed out of our homes. However, this year the market has remained open throughout the lockdown. Not just open, but buoyant.
Make no mistake, it has not been easy. The concerns many people have over permitting people into their homes, the obligatory masks, hand sanitisers, social distancing, they have all led to a wait and see mentality that has created a genuine shortage of stock.
If you are a fan of David Attenborough you may recall the image of young puffins, or pufflings, about to launch from the cliffs to take their first flight. The housing market felt something like that in March. Potential vendors all looking to see who would make the leap and put their house on the market. The buyers were circling, eagerly anticipating the phenomenon of new stock.
As properties started to come to market, we saw a wave of viewings and a vetting of potential buyers before they were permitted access. Proceedable? This became the keyword. If you needed to sell you couldn’t buy.
So why are we seeing this? Simply there are not enough properties coming to market to satisfy the demand of buyers who have been waiting, in some cases for months, to find their next home. Savills have 8 buyers for every property they advertise. Other agents do not have time to photograph or advertise properties, they are selling that fast. And then there is the dreaded Best and Final…
Best and Final is not new, but it was never common, until now. Throughout April we saw a swathe of properties sold within a week of coming to market and many going for guide or over guide price with multiple offers leading to the inevitable decision by the vendor’s agent of the best and final. For those who are familiar with the concept it creates a sense of dread. For those who are not it is quite exciting the first time. It is rather like ebay for the property market. Get your bid in by a certain time and hope you are the winner.
Best and Final gives the vendor the opportunity to consider the best bids and to decide who is going to buy the property. It is not the highest bid that wins but the best package presented by the buyer to the owner. Proceedability, cash, flexibility, swift exchange – all considerations for your bid.
So where do we go from here?
Fortunately, the pufflings have started to take flight, property is coming onto the market and the buying frenzy has started to calm a little. There are still plenty of buyers and houses are selling very VERY fast. However, as we acclimatise to these market conditions, we appreciate the importance of being ready.
If you are considering waiting it out, then just consider market factors. Do we believe prices will correct after the insanity of the market at the start of 2021? No. There is simply too much demand at present for there to be any change this year. We have seen a 10% increase in house prices since the 1st lockdown and it is possible that, in waiting, you may see the market get away from you.
Will there be a reverse at the end of this bull market? Again, this is unlikely. There is a wave of buyers moving to the country and indications are that the working from home and flexible working conditions is here to stay.
The Stamp Duty holiday and the furlough scheme will end and there will be tough times ahead for many. However, the economy is already beginning to rebuild. Government support in businesses and investment, low interest rates allowing excellent mortgage rates, a flexible work scheme by many companies, and high demand with limited stock all lead to the conclusion that this is not a bubble that is going to burst but a strong market that is here to stay.