Property market reaches ‘end of the beginning’ - David Alexander comment

Following the British-led defeat of Axis forces at El Alamein in October 1942, Winston Churchill famously said that the battle “was not the end.

A quote from Churchill reflects our first week of trading after lockdown, says Alexander. Picture: Walter Stoneman/Hulton Archive.

It is not even the beginning of the end. But it is, perhaps, the end of the beginning.” Without trying to compare myself with our great wartime leader, I would say these words more or less reflect our first week of trading after lockdown. Things have not returned to normal. Nor to anything like normal. But at least we are experiencing the beginning of normality.

As this column revealed last week, grasping all the benefits of the internet and other technologies has enabled the company to function during lockdown, and home-working by non-furloughed staff has – to my great surprise – been remarkably successful. Nevertheless, this was nothing like the exhilarating experience of fully opening our doors on the morning of Monday, 29 June.

Although, as I also explained last week, “virtual viewings” had kept rental business relatively buoyant during lockdown, it was with some trepidation that I waited to see how lifting restrictions on wider business activity – and, crucially, a return to physical property viewings – would affect our sales division.

By the end of the week I felt cautiously optimistic that Covid-19 might not turn out to be the catastrophe for the property market that I, along with many others of my ilk, had feared at the end of March. In those first six days we received three offers for properties on our sales list – miniscule compared to what one normally might expect at this time of year but not too far off that which pertains during the annual Christmas and New Year break.

Almost certainly the number would have been greater had it not been for a general reluctance among the public to take part in the physical viewing of vendors’ homes, which the government permitted to resume from Wednesday of last week. From personal experience, over the past three months it is clear the public are divided into two camps – those who go out of their way to physically distance themselves and those who act as if the presence of Covid-19 in the atmosphere is not an issue – well, perhaps for others, but certainly not them.

Pent-up demand

As those in the former category will shy away from physical viewings for the foreseeable future, this “safety first” attitude will clearly affect the number of sales. Encouragingly, however, last week’s experience provided a sense of a high level of pent-up demand, with many more properties currently under serious negotiation, some of which will almost certainly lead to bargains being concluded.

Then there are those whose intention to put their homes on the market during the spring selling season was aborted by lockdown. The offers to which I referred earlier more or less mirrored the market prices that existed three months ago. This has raised hopes that we might not experience a severe downturn in values, but at the same time, vendors will need to be more flexible than they would have been this time last year.

Certainly there will be no return – at least for the moment – to the situation where sellers of even pristine properties in the most sought-after locations can expect ten or 12 offers to have been delivered by the closing date – if, indeed, demand is sufficient to even justify setting a closing date.

Almost inevitably, some vendors will receive risible offers from chancers and these will rightly be ignored. Having said that, accepting a “respectable” lower price might be wise, especially if everything else – eg a transparent offer not riddled with conditions, and a convenient changeover day – ticks the right boxes.

Most importantly, buyers should be aware that lower offers are a reflection of the wider market, not just their own property. So if they have bought, or intend to buy, something else, it will be a case of swings and roundabouts. Clear heads and realistic attitudes are what will see vendors through: as Churchill said, it is only the end of the beginning.

David Alexander is MD of DJ Alexander

SCOTSMAN.COM

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