The Impact of Corona on London Real Estate

As of the 13th of May, the UK government gave the green light for property agents, removers and surveyors to return to work after essentially being on hold since the 26th of March. The return to business has sparked plenty of speculation about house prices, with some publications sparking fear into the market by reporting steep discounts on properties (on select properties) all over the UK. There is no question that the corona virus has had an impact on the property industry, not just in terms of pricing but also what buyers are looking for. Having said that, however, the reality is we still have no concrete evidence of how the pandemic has truly affected pricing/demand. In this update I’ll discuss where I believe the market is heading in the near future, the potential change in priorities when looking for a home, and how my services can help you find a home if you are relocating to London in the midst of this pandemic. 

Let’s start with the obvious – there is no question that the corona virus has had impact on property values in the UK. For over two months, no viewings or valuations were allowed, the only completions that took place were those that were agreed upon pre-lockdown. Just before this, the market was starting to pick up after the election of the conservative party in December 2019. We could now be returning to a buyer’s market, potentially creating a unique opportunity for buyers to achieve higher discounts. Knight Frank revised its 3% anticipated fall in UK prices in 2020 to 7%. Another leading estate agency, Savills, is predicting a short-term price drop of between 5% and 10%. Both agencies are expecting a sharp recovery as of 2021 - Knight Frank is predicting an 8% price growth in prime Central London property next year. This is no doubt going to cause a Mexican stand-off with sellers who don’t need to sell – in this case, buyer and seller expectations will not match and therefore it will be more challenging to get a deal done. New developments, on the other hand, will need to sell to cover loans and discounts up to 10% may be achieved in my opinion. 

These last few months in quarantine might have created a shift in buyer priorities. Firstly, it has proved that thanks to modern day technology, it is possible for many people to work from home and therefore it is no longer essential to live in the city for some perspective buyers. These buyers are now more willing to look outside London, where they will get much more space for their money.  Secondly, all this time in confinement has made potential buyers prioritise outside space more than ever before. This comes hand in hand with the first point, as outside space comes at a significant premium in central London. While there may have been a shift in many buyer’s priorities, it’s important to note that there will always be a demand for London property. 

Are you moving to London and concerned about finding a rental property in the midst of all this Corona chaos? The government have been debating setting a two-week quarantine for anyone flying into the UK, making it harder to find rental properties for those moving to London for work or studies in the upcoming academic year. As an independent property advisor, I can help alleviate the stress of finding a home in time by hand picking properties based on your requirements and carrying out virtual viewings with you via Facetime. These viewings will be as comprehensive as possible – checking cupboard space, making sure toilets flush, checking water pressure, etc. Should the property be right for you I will then negotiate for the best terms on your behalf, this way when you do arrive to London all you have to do is pick up the keys. Naturally, these virtual viewings also apply to those who want to buy a property; however, I would always advise a viewing in person should you want to put an offer in unless you are buying off plan. Please contact me on iyad@iyadgrahne for more information.