Nicolas Van Patrick gets back to business
It is good to be back. The government’s announcement that viewings could recommence in England has enabled the Nicolas Van Patrick team to get back to the office and as back to ‘normal’ as possible. Of course, things are very different after a 10-week lockdown as we all come to terms with living and working with a pandemic but it is good to see each other again in person and be back in the office doing deals.
Our patch, Knightsbridge, is undoubtedly much quieter than usual, mostly because the shops and restaurants which the area is famed for, are closed, and flights aren’t arriving from the Middle East or anywhere else for that matter. When one of us popped into the NVP office during lockdown to check all was ok, we will never forget the quietness of it all. With Ramadan not long finished and Eid following, normally Knightsbridge would be buzzing but it couldn’t be more different. We await Harrods re-opening on 15 June with an eagerness we did not think was possible.
While it is a surreal situation on many levels, there has been an uptick in new instructions, enquiries and offers as people pick up the pieces and get on with their lives. These are positive early signs which we hope will turn into solid transactions. If property is priced correctly, there is interest and the phone is ringing. We have received enquiries about one flat throughout lockdown; there has now been six viewings with three offers at asking price. Some might question whether we were underselling this property or is it simply a good flat priced well?
There is much speculation over the movement of house prices. The truth is no-one really knows and much of the data being published now is pretty historic. What we do know is that the biggest impact a property has is at launch. If vendors are realistic and price correctly, they will benefit from that first flurry of activity and generate interest. But if you get it wrong and over-price, you will lose that initial impact and end up chasing down the market over a protracted period.
As always, best-in-class will command a premium; everything else needs to be priced attractively. Buyers are likely to want a discount 5 to 10 per cent below where prices were in March. The £1m to £2m market is likely to continue ticking along but we are more worried about the £3m to £9m market, which has been tricky for a while. Frustratingly, there was potential that was about to unlock at the start of the year as the market picked up but it is largely decimated now unless there are big discounts on offer or the property is best-in-class. With bonuses not going to be paid this year as a knock-on effect of Covid-19, there will be less money around to spend on this level of property.
Still, on a wider level, there are indications of strong pent-up demand. Property portal Rightmove reported its busiest day on record on Wednesday 27 May with more than six million visits to its listings, an 18 per cent increase on the same day a year ago. Certainly the domestic market has much going for it – if a buyer has not lost their job and is prepared to take a long-term view, then mortgage rates are super cheap and it could be a good time to step into the market.
Many details still need ironing out before we can establish the true direction of travel for the housing market. Many of our clients are Middle Eastern and of course not able to travel. Government proposals for a two-week quarantine period will undoubtedly have an impact. And then there is the question as to how many people will come over to the UK even when quarantine is lifted. This is having a considerable impact on the student rental market around Imperial College London, for example, – on one or two-bed flats up to £1,000 per week – as the usual flow of Middle Eastern and Chinese tenants is on hold.
For now, and the foreseeable future, gloves and masks on viewings are the new norm that we all need to get used to. We are less convinced by virtual tours, even though most of our buyers and tenants come from overseas. A virtual tour is a nice thing to have but whether people will actually transact on the basis of this is another matter.
We are glad to be back but we are back in a very different environment. At the moment we can’t do our job out on the streets talking to clients but as lockdown eases we hope those days will return before too long.