Almost seven weeks after the country’s Covid-19 lockdown on 23 March, the UK is on the brink of seeing the restrictions being gradually phased out. Wales is set to announce the results of a review on their lockdown position today, Friday 7 May. Ireland’s government has already laid out plans to begin easing its lockdown in a controlled five-step process starting on 18 May. Scotland’s First Minister, Nicola Sturgeon, who has just extended the Scottish lockdown a further three weeks, has also set out some examples of changes which will be implemented ‘when it becomes safe to do so’, and although the English lockdown has been formally extended, the framework for the easing of England’s lockdown restrictions is expected to be announced this Sunday by the Prime Minister, Boris Johnson, with some minor measures set to be implemented first thing Monday morning!
The New Normal
This news will come as a welcome relief for the whole UK population including property business owners and their employees who have been left in limbo not knowing how much longer their livelihoods can survive without some certainty about when they can trade again.
However, this easing of restrictions certainly doesn’t mark the return of ‘business as usual’ for any business sector. Instead, it marks the beginning of a ‘new normal’ way of living and working.
The UK residential property market was forcibly put on pause after the government introduced emergency COVID-19 measures that banned all but emergency home moves at the end of March, putting a stop to virtually all property transactions.
The new emergency laws mandated that only essential businesses should remain open. Estate agencies were told their branches must close and that staff couldn’t ‘visit people’s homes to carry out market appraisals’; surveyors were banned from carrying out ‘non-urgent surveys’ in occupied properties and conveyancers were told to advise their clients not to exchange contracts on occupied properties.
Some 373,000 property transactions worth £82bn have been put on hold due to Covid-19, amounting to a backlog of £1bn of estate agency sales revenue from deals, Zoopla one of the UK’s largest property portals has reported.
Remote Working & Virtual Valuations
Several property agents have remained open for business during the lockdown, however, they have had to operate in a different way. The pandemic has fundamentally changed the way the property market works. Estate and letting agents have needed to adapt by providing virtual services in place of those previously carried out in person, for a while at least.
When estate agent offices were forced to close, the staff were either let go, furloughed or asked to work from home. While not able to carry out property visits themselves, remote workers have still been able to take calls from buyers and tenants, diverted from the office, and collate viewing waiting lists for when the lockdown is eased.
Other agencies have embraced popular lockdown communication tools such as FaceTime or Zoom to sign up new clients. For example, Haart estate agency has introduced a system, where the seller takes photographs and records a video of their own home, they then discuss the property and the valuation with the agent via Zoom. “While some agents have closed their doors completely, we are adapting to give you access to potential buyers and get you moved,” Haart writes on its website.
Savills has been surveying its registered buyers to get a better idea of how the pandemic has affected their property choices. It will probably come as little surprise that:
- Space has become a must-have: with 49 per cent of respondents expecting home working to continue post lockdown and 39 per cent of the under 50s now wanting a bigger home
- 40 per cent of respondents said they are more likely to choose a village location, while one in six said they would be prepared to have a longer commute
- 71 per cent of younger buyers said they crave more outdoor space and are looking to buy in rural locations, while older homeowners were more committed to downsizing
“It is clear that the current crisis has made people think more about the space they live in, the attributes they most value in a home and, in some cases, where they want to live, all of which is likely to drive activity at the top end of the market as we come out of lockdown,” Lucian Cook, Savills Head of Residential Research explained.
Some agents have also used the time to carry out Covid-19 risk assessments and order Personal Protective Equipment (PPE) in readiness for a social distancing return to work.
In addition to virtual valuations, another contactless measure forward-thinking estate agents have adopted either before or during the lockdown is the facility to provide virtual viewings. Remote, virtual tours (either customer recorded, agent recorded or professionally recorded pre-lockdown) are taking off as home-hunters continue to look for new properties during the coronavirus lockdown. Zoopla has reported that eight per cent of all homes currently listed on the portal have a virtual tour, and it seems this virtual technology is proving so popular that buyers and tenants have even offered on properties on the strength of a virtual viewing alone.
Independent estate agency Trevlyn Properties has already experienced the power of virtual viewings with properties on their books being sold or let during the Covid-19 lockdown without actually being seen in person.
One example of a virtual sale was when a couple based in Hong Kong made an enquiry through Zoopla on 10 March about a two-bedroom flat in Canary Wharf, London offering spectacular views from the terrace priced at £899,950. After seeing a walk-through video, they put in an offer for £860,000 which was accepted. Conveyancing for this property is currently in progress.
Additionally, a newly refurbished three-bedroom flat in Stoke Newington, North London that was available to let for £2,100pcm was due to be viewed by three sharers living just around the corner, but the coronavirus lockdown made it difficult to view the property in person. The agency sent the customers a previously recorded walk-through video via WhatsApp – the let was agreed shortly after and the flat sharers are due to move in soon.
“Video viewings are an extension of what we offer as an online agency,” Trevor Tackie, Director, Trevlyn Properties explained. “People buy designer clothes they’ve never tried on or touched, but they feel confident buying because they’ve seen a video/image and trust the seller. Now that e-commerce view is coming to property.”
As with all remote purchases, the Property Ombudsman has urged agents to ensure consumers who choose to buy or rent based on virtual viewings alone are protected from unfair practice.
TPO’s lettings guidance reads as follows: “Whilst viewing a property is always advised, point 9a of The Property Ombudsman’s Code of Practice for Residential Letting Agents references electronic means as an exception, stating: 9a. It is not advisable for you to accept, or recommend a landlord to accept, an offer on a property that has not been viewed either by the prospective tenants themselves or by a suitably authorised representative of the prospective tenants, for example, an appointed relocation agent or direct associate. Exceptions might be made when a prospective tenant resident overseas is willing to be contacted by letter, fax or electronic means.”
Regarding properties for sale, TPO suggests that “video viewings are used by agents as a filtering exercise and that any serious buyers are provided with an ‘offer agreed subject to viewing’.”
Advising agents on best practice, Katrine Sporle, Property Ombudsman, commented: “We appreciate that agents are having to adopt new ways of working to accommodate the government restrictions currently in place, and similarly we are working hard to ensure we provide the right guidance to help agents do this professionally and protect consumers from unfair practice.
We fully appreciate that agents may not be in complete control if a video viewing has been recorded or is being conducted by the seller or landlord. In this instance, we would advise agents to remind the vendor/landlord of the Consumer Protection from Unfair Trading Regulations (CPRs) responsibilities upon them so that agents can keep a record of what information was shared and when.”
Life after Lockdown
According to The Guild of Property Professionals, their members are ready for a safe return to work. The association has written an open letter calling on the government to ease restrictions on the property market, saying that the majority of estates agents now have the tech tools, processes and services in place to carry out the home buying process virtually by means of video viewings and valuations and electronic contracts and documentation.
“Technology has always played a part in the industry, however, now it is no longer optional but a necessary part of the property sector landscape,” Iain McKenzie, CEO, The Guild of Property Professionals admitted.
The Housing Minister Chris Pincher is also said to talking with key industry businesses such as estate agents, conveyancers and removal firms to develop social distancing guidelines that it is hoped could allow agents to return to work in the very near future. Proposals are said to include contactless viewings where vendors will be asked to leave all doors open and lights turned on to reduce prospective buyers having to touch any surfaces.
The property industry, indeed, the world is operating in unchartered territory right now. The industry is preparing itself to embrace a new normal until a vaccine or cure is found. Despite the current challenges, we suspect the property market will show resilience, and rebound from the current low and rebound fully over time, just like it always has done in the face of economic difficulties.