Impact of Coronavirus on the Property Market
We have been reporting on lots of different theories of how the coronavirus pandemic would affect the property market if at all. While trying to come with predictions can be helpful, there is no substitute for hard evidence and, as since the market has now been open for a little over a month now, we are starting to see some data from the transactions that have been taking place. A lot of the normal protocol for property deals have not been possible in lockdown but as time has gone on people have found ways to get around the restrictions. By utilising virtual tours and video calls transactions are slowly creeping back up to usual levels. We can look at the biggest real estate companies for information on the most popular types of property at the moment.
First, let’s look at the overall trends that can be seen from the last months activity. So far, we can see that renting as a whole seems to be making up a larger portion of enquiries than it did previously. The likely cause of this drop is that high unemployment and low employment stability due to the pandemic has led to a decrease in the number of people looking to make big investments like buying a house, so these same people will be looking for places to rent until things go back to normal. The next area where demand seems to have changed is the type of housing. Houses have seen a big uptick in interest compared to flats or apartments. This is shown by the fact that rents on houses have seen a 44% increase just his year. There could be a link to the first trend as people defer buying their own homes, they look for a more homely place to rent. Another changing aspect of property searches seems to be location. Rightmove has reported a major increase in searches for property further from city centres. This will mean that areas with good commuter connections will be increasingly important for tenants if this continues. Again, there is another connection as housing becomes more common the further from city centres you are and vice versa for flats.
Next let’s look at the most in-demand property features. We’ll start off with a carry on from the previous trends and this is gardens. As people look for bigger homes out of town to rent, a garden is a common feature of these types of properties. Online searches for properties for properties with outdoor spaces have increased by 200% since March. Rightmove has also reported a rise in searches for home office space. This one is a tricky one to accommodate as it will take up valuable space in the home which may be better used for other features like a bedroom or garage. However, it may be something to consider if working habits don’t return to normal after lockdown is completely lifted. The final change, which may not necessarily be related to the others, is a high demand for bike storage. This is likely the result of developing trend as bikes become more popular, but it seems to be an extremely strong trend aggravated by the lockdown as there has been a 1500% increase in searches! So, wherever you have rental property some sort of safe space for bicycles may make a real difference.
One more interesting trend but perhaps not too relevant is the effect of coronavirus on commercial property. The general trend for the high street in recent years is that the internet has reduced the business of many types of shops causing many to close. The only exceptions that were holding their own were places that couldn’t be replicated online such as cafes and restaurants. Unfortunately, these are the same places most affected by quarantine conditions and so in the last few months we have seen many of these sorts of establishments to close. So, in the next coming months we will likely get a better idea how the high street will look going forward. As we have pointed out online services continue to increase in popularity, these include delivery services which has also been the only way for some people to get things like food during lockdown. These types of services rely on multiple storage locations to provide products all over the country as fast as possible. So commercial property like warehouses will likely continue to be lucrative.
To summarise, these changes would be expected if life in lockdown is expected to continue. This is shown by the fact people want homes better suited to spending all day there, with features like gardens and more space. This suggests that this could be a trend moving forward but the one piece of evidence that is worrying is the lack of people buying. Potential buyers preferring to rent hints towards this change being a temporary measure where they end up buying a home in a more built up area. So, these are unprecedented times, which highlight the importance of keeping an eye on the property market data. As more and more months of enquiries and transactions go through, we will be able to see these trends more clearly. We will keep you up to date with the evidence as it comes out.