You know that feeling when you are at home self-isolating, binge watching a boxset and you receive a work call so you have to hurriedly hit the pause button to take the call – this is essentially, in my view, what is going to happen to the residential property market. It will be on pause – no supply and no demand.
My first economics lecture taught me the basics, supply and demand are the key principles to property values. No supply and high demand = growth, high supply and low demand = decline, equal supply and demand = plateau. With everyone on lockdown, so too is the purchase market, although those estate agents who took up 360 virtual tours will be able to continue to show their stock.
I do not have a crystal ball and I do not know when this will end, in the same way I cannot predict house price movement. If we can contain this fast, we can hopefully get back to the new state of normality. The longer it takes, the more potentially draining it will be on resources. People are likely to have less disposable income and will probably need to dip into their savings, and this could impact on the deposits that have been saved to buy property.
For those of you who know me, you know that I am a positive person and I always like to look on the bright side of life. Transactions that are already well advanced are likely to proceed, albeit with the potential of some complications around the completion date and, of course, the remortgage market remains a source of significant activity for brokers
Surveyors, at this stage, are mostly on lockdown, but only from a property inspection perspective. We are still working, as are you, but just from home. The market can continue as we use desktop valuations and we have already been advised that physical inspections will not be mandatory for many of our lender clients.
When you are placing remortgage business and deciding on your choice of lender it will be important, for the time being, to consider the valuation techniques accepted by that lender and to work with surveyors, like Arnold & Baldwin, that are able to deliver those desktop valuations.
Take advantage of low interest rates to work your back book and take a proactive approach to contacting, reassuring and advising your clients throughout this difficult period. This will help to keep your business ticking over while the purchase market is set to pause.
Now is also a good opportunity to spend time refining processes, systems, content – all of which could help businesses to emerge stronger on the other side. And, of course, it is important that you focus on what matters most – the wellbeing of your family, friends, colleagues and community. If you are able to, think about ways you could help your community. At Arnold & Baldwin, for example, we have offered our vacant office space to the NHS to utilise in any way they would like, potentially as additional capacity for a 111 call centre.
These small steps can make a big difference, as we all pull together to emerge from this difficult situation as quickly and in as good shape as possible.