22 April 2020
Every Spring, people ask me, “just what is in store for the property market?” In recent years although the market was affected by the now almost forgotten Brexit issues, the answer has (with the benefit of hindsight obviously!) been ever increasing prices. The market has been turbo charged by cheap interest rates giving us the double whammy of mortgages cheaper than rents and saving rates so low, anyone with some money has looked to invest it in property, from pensioner buy to let moguls to the bank of mum and dad, property is seen as a safe bet for parking money, receiving income and the icing on the cake, big capital growth.
January 2020 started as it meant to go on. Brexit was ‘done’, a damaging election was behind us and the pent up demand was released. Enquiries were up on previous years, prices started another upward swing, yes for anyone in property, years of political chaos and election after election were over. We could now just crack on with our jobs, a ‘normal’ property year was assured.
Needless to say, by March that certainty was gone proving that it is impossible to really predict what will happen to property prices.
So 2020 won’t be the year we all thought it would be. But that doesn’t mean that members of The NAPB have given up, waiting for this all to blow over. Far from it.
The demand from sellers has gone through the roof. At my company, House Buy Fast whether its online searches, phone calls, email enquiries, whatever you look at, volume is up on almost every previous year since 2008. Sellers – the keen ones at least – are hamstrung. Estate agents and many solicitors have shut up shop, buyers can’t view and even if they do, they will struggle to get a mortgage while surveyors are on furlough. Members report many enquiries, especially from former landlords stuck with an empty buy to let and from those who have recently inherited a property that is empty. The property will still need to be maintained, mortgages paid, council tax, insurance cover maintained.
For many that is tough even in a good market but now, three weeks or so in and the realisation has hit that we may be less than half way through. And when we return, what will the market be like? Surely it will take some time to recover our previous lives before we go out house hunting. It could well be many months before we see anything like what we used to think was ‘normal’ returning.
So we’ve stayed open, dealing with enquiries, trying to help where we can, to offer lots of possible solutions and – where appropriate – agreeing to purchase the unwanted property. It’s a gamble. We generally cover all fees and pay around 87% of market value which gives us a margin when we re-sell the home as soon as we can after purchasing it. Whether there will be that margin in a month, two months, three, remains to be seen. We’ll need some more of that hindsight!
Jonathan Rolande MNAEA MICBA MARLA began in the property business in the late 1980’s and is a Director of House Buy Fast and helped to found The National Association of Property Buyers in 2013. He has worked closely with The Property Ombudsman to develop a Code of Practice for Residential Property Buying Companies.