Property buyers look to capitalise on post-lockdown market

Anthony Rose, director at LDNfinance said some clients expected “opportunities over the coming weeks to capitalise on the uncertainty that Covid-19 has added to the property market”.

Some advisers have reported of prospective buyers doubting agreed purchase prices, as experts have predicted that prices will fall.

While Mr Rose noted that his clients were not predicting “sustained or deep falls” in property prices, he said they expected “opportunities where sales agreed before the crisis may have fallen through or that some sellers are particularly motivated to sell quickly in some instances and there will be opportunities to purchase properties quickly at a perceived discount”.

Mr Rose added: “This expectation has seen a push in investors looking to refinance existing assets to release funds to enable them to move quickly should the opportunity arise.”

Likewise Sarah Fox-Clinch, director and property finance consultant at Fox Davidson, said her firm had seen an increase in enquiries, particularly from buy-to-let landlords potentially looking to raise capital now against existing properties, ready for a quick purchase of additional property to expand their portfolio over the next few months.

Ms Fox-Clinch said her firm had also received enquiries from first-time buyers “trying to get their ‘ducks in a row’ so they are in a perfect position to move quickly with a purchase once lockdown ends and they find a property.”

Clients eyeing bargains

According to the latest RICS UK residential market survey, more than 40 per cent of chartered surveyors have predicted that prices could fall by 4 per cent or more.

Some prospective purchasers believe now is a good time to secure a property... Many of the clients we are speaking to are hoping to achieve a reduction in pre-Covid-19 prices.Andrew Brown, managing director at Bennison Brown

Andrew Brown, managing director at Bennison Brown, said the prediction of falling prices was “fuelling demand from first time buyers and investors who want to secure what they perceive as a bargain”.

He added in the last two weeks his firm had seen “double the volume of enquiries fuelled by this theory.”

Mr Brown said: “Some prospective purchasers believe now is a good time to secure a property. Interest rates remain extremely low and if you have over a 15 per cent deposit many deals are still available for clients to proceed.”

The beginning of May saw average mortgage rates fall to historic lows, according to data provider Moneyfacts.

Mr Brown added: “Many of the clients we are speaking to are hoping to achieve a reduction in pre-Covid-19 prices.” 

Reservations remain

The property was effectively closed for several weeks due to the coronavirus lockdown but was reopened Wednesday last week, when estate agents and surveyors were allowed back to their offices to resume their business.

But while some clients look to capitalise on market conditions, confidence of prospective buyers elsewhere could take longer to return.

Martin Stewart, director at London Money, said confidence had been “severely damaged” by the coronavirus.

Likewise Carl Shave, director at Just Mortgage Brokers said while those in the industry would be looking for a “healthy return of activity”, a lot would “still very much depend on consumer confidence in regard to safety and financial security”.

Mr Stewart said he anticipated lenders would become more stringent when assessing potential borrowers. “I expect to see anyone on furlough having to provide written confirmation from the employer that they will be returning to work.”

Of businesses that responded to the Business Impact of Coronavirus Survey, 78 per cent of the workforce had been furloughed in businesses that had temporarily closed or paused trading, according to data for March 23 to April 5 from the Office for National Statistics.

Daniel White, managing director at Champion Hall & White, also said he would be “a little cautious of any new business being buoyant in the short term”.

chloe.cheung@ft.com