Covid-19 and its impact on the PCL housing market
Before Covid-19 hit, we had much to be optimistic about. Following a strong final quarter to 2019, we were upbeat about the prospects for the housing market in 2020. It wasn’t just Nicolas Van Patrick who took this view – the industry as a whole was more positive than we have seen in a long time. Data and statistics from research departments, portals, agents and lenders all reflected our sentiments.
There is no doubt that Covid-19 has completely derailed this, sending not just the property market but the global economy into freefall. However, we always try to look for the positive where we can – let’s face it, there is enough negativity out there. One glimmer of hope for us is that even in the midst of this unprecedented lockdown we are still getting enquiries from buyers and are talking to a couple who are contemplating making an offer without even seeing the property. On top of this, the sales pipeline we had going into this pandemic has remained committed, even though the likes of Michael Gove have been advising people not to exchange. Thankfully, we have exchanged and completed on all our deals and the five still under offer remain committed and on track. This gives us reason to stay sanguine and believe our business will get through this.
The problem is we aren’t sure about exact timescales – how can we be, when the government advisers who pop up on the television every afternoon don’t seem to be any the wiser? It would be fantastic to know when we might begin to get some sort of new normality in place by being able to return to the workplace but there is no sign of that yet.
If we presume there might be some sort of activity in the workplace at some point in the second quarter, we would expect the market to be in a Mexican stand-off for a few months. Buyers could well make silly offers to take advantage of market volatility while sellers, who more often than not are forced, may sit back until the lay of the land is clearer. This is unlikely to be apparent for some time.
There is no doubt that fortune will favour the brave, with opportunities to pick up some great deals. Sadly but inevitably, there will be casualties of the virus, with some falling into hardship as a result of losing their jobs. But for most of our clients who tend not to have debt on their properties, they should be able to sit back and wait for the dust to settle. With interest rates at a rock-bottom 0.1 per cent, those who have mortgages on variable or tracker deals have never had it so good.
The Nicolas Van Patrick best-case-scenario is that we might return to some ‘normality’ in the fourth quarter of the year, although we would caveat that by saying we need to see how things progress over the next few weeks and months.
Agents who are overstretched or don’t have a solid lettings book will go into insolvency or merge with others to try and survive, which is what happened following the 2008 financial crisis. In the end, the strongest will still be here and with even fewer players in the market, this will create opportunities for them.