LONDON’S PRIME PROPERTY MARKET DURING CORONAVIRUS PEAK
How is London’s Prime Property Market Adapting in the Midst of the Coronavirus?
Across the globe, we are all experiencing the rapid acceleration of the coronavirus outbreak.
Whether your UK home is your main residency, second home or a pied-à-terre, we’re taking a look at how the luxury property market is adapting in the wake of covid-19 and the predicted situation in the aftermath of the crisis.
In the past few months, the property world has experienced a mixed wave of trends, from the broadly flat 2019, post-election increased certainty, to a worldwide ‘hiatus’.
The country’s predicted quarantine measures a few weeks ago saw a rush in tenants securing high end residential rentals as the lockdown became more stringent, and spending time at home became more important than ever before. Whilst property sales have naturally slumped (70% according to some experts), other firms are advising that the prime London ‘market is not dead’. This mirrors a small portfolio of luxury prime London homes, all carrying an asking price of circa £25m, which are now available and ready to view, but from afar of course.
Virtual viewings though are not a new idea and have been available for years. Sophisticated prop tech has seen innovative advancements with 360 viewing, previously and mainly used for overseas clients. We’re now in the cusp of seeing virtual viewings available on many platforms as the industry adapts to the new world of quarantining. Of absolute necessity is the relationship developed with the agent, viewers and potential buyers will trust their judgement when remote viewing is the only option. Many buyers will find this concept unfamiliar but it’s an opportunity to keep interest alive and the cogs turning, albeit slowly.
Notably due to travel restrictions globally, most international buyers will naturally defer purchases until the covid-19 freeze has signs of thawing. Most experts are advising that we are likely to see a surplus in properties becoming available, which will drive sales prices down and could pose opportunities for foreign buyers into the market.
As to be expected in a global pandemic there will be consequences of the virus across the landscape. Evidence from the East suggests that changing family situations, such as a forecast in increased divorce proceedings and separation rates, will naturally provide more residential properties emerging on the market.
However industry leaders are expecting there to be an influx of demand at the end of the year and early 2021 as the economies across the continents recover and recoup in the wake of the effects of the coronavirus. Part of this extrapolation lies in the hike of stamp duty tax in April 2021 for international clients as announced by Chancellor Rishi Sunak. We are expecting to see supply and demand increase across prime London, with foreign buyers helping kickstart ‘post corona’.
These are exceptional circumstances and buyers or sellers looking to enter the property market are advised to do their homework at this time, making necessary contact with agents whilst still remaining cautious. The landscape will have naturally changed but adaptation in all forms will be key to progress.
Whilst many buyers and sellers will feel ‘on hold’ at this time until post lockdown, vendors in a position to defer until later in the year are advised to do so, or letting on a short hold tenancy agreement, which is still expected to see a competitive environment once lockdown measures are eased.
In the current environment, it’s not yet clear how we are going to bounce back but we will, inevitably, it will just take time to revive and restore.