From then, the sales market will be able to operate as near to normal as has been possible since the end of March, the one big exception being that physical viewings of interiors will still not be permitted – not that many vendors are itching to have strangers through their front doors at the moment.
Unsurprisingly, there has been a substantial number of “virtual viewings” by potential buyers, though I have still to come across anyone prepared to buy a property as their main home on the strength of it – the practice is not uncommon among investors based in England or overseas buying rental property here.
Despite the wonders of modern HD video technology, buyers still want to see layouts and dimensions for themselves. They want to know how it “smells” – not just in the physical sense but in the more abstract “feeling”.
A peek at the neighbours is another important issue with a lot of viewers, especially in a tenement stair where each door has multiple names suggesting the neighbours might be students or other groups of young people –not a great fit for those seeking a quiet home life.
Still, virtual viewings are beginning to start a new trend whereby potential buyers will actually put in a formal offer but make it “subject to physical viewing when permitted” or in similarly couched terms. This could be just one of the longer-term trends within the market that will result from the Covid-19 crisis.
After all, who would have thought that just a few years ago, in Scotland, we would see “sold” boards on properties that contain the caveat, “subject to survey” or “subject to conclusion of missives”, but these are now commonplace, especially in a period of depressed sales. As this trend suggests, there has, over recent weeks, been an upturn in buyer interest, if still tentatively.
At the same time, people who were thinking of moving just before lockdown are coming back and asking if now is a good time to put their properties on the market or if they should wait until the wider economic situation becomes clearer.
Not even Mystic Meg could have answered that one with any great confidence but there is one crucial factor they should consider. When recommending market values as part of the Home Report, chartered surveyors must partly base their decision on local historical evidence. This suggests that, for the immediate future, most properties about to go onto the market will do so at pre-lockdown values.
Whether these values will have taken a tumble in a few months’ time is impossible to say but I am fairly confident they are not going to rise during that period. So if you want your for-sale property valued at what it was back in early March, now may be the most opportune time to put it on the market. Compared with sales, virtual viewing has actually been a great contributor to keeping the rental market in operation.
Obviously people are more prepared to sign up to a tenancy on the basis of an “online punt”. They don’t need to produce a large outlay nor make a long-term financial commitment. They can leave after giving 28 days’ notice – and there’s no shortage of suitable alternatives given the collapse in demand for short-term holiday lets.
This helps explain why during May we let 150 units, close to the figure for that month during “normal” times. Among those signing up were owner-occupiers who secured a sale immediately pre-lockdown. They’ve looked at how “keen” rental rates are just now (even for top-range properties) and have decided on a temporary change of lifestyle – confident that when they start looking to buy again, there’s a good chance prices won’t be any higher than today.
Another example of Covid-19 changing the market – and no doubt there is more to come.
David Alexander is MD of DJ Alexander
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