June Market Update
As we enter June and lockdown measures are eased, the property market is slowly shifting into gear. We are booking in viewings again, where permitted and gradually being presented with more opportunities.
Nationwide has recorded a nationwide 1.7% fall in house prices in May compared to the previous month. However this is based off extremely limited data and information on sales completed after lockdown will take some time to filter through. We stand by our March predictions for the market and the majority of our clients are taking the same view. At present, no clients we are working with are prepared to offer pre-covid levels.
Selling agents are being understandably bullish but we have already been quoted 10% discounts on several interesting properties. At the same time, other properties are coming back onto the market at prices higher than they failed to sell at in 2019. The market for the rest of 2020 will be increasingly complex and we see sale prices being agreed at the widest range for a long-time. Some (but not many) buyers will inevitably let emotions rule and pay Feb 2020 prices but long-term they will be in the minority.
As we have previously written, buying with a 5-10 year time horizon should be the minimum. Historically London has strongly recovered from market corrections and quickly finds new highs. The longer a buyer’s time horizon, the more they can insulate themselves against the risk of COVID whilst simultaneously taking advantage of historic long-term interest rates. More and more of our inquiries are from buyers who could pay cash but are looking to ‘lock-in’ 5-10 year fixed rates. As before coronavirus, international demand is still there. Pound sterling’s favourable exchange rates against the $ and other major currencies will support demand in Prime Central London and other neighbourhoods with excellent long-term prospects. Coronavirus will change many things but it won’t stop London being one of the best cities in the world to live or invest in.
Now more than ever a buying agent can help clients navigate an increasingly complex marketplace. Identifying a combination of motivated, pragmatic vendors and best in class properties – whether that be off market or through traditional channels – is more demanding than ever. If you would like to discuss your property search with Alex today, please get in touch.