How Will Lockdown Impact Housing Prices?
There is no question that coronavirus has had a significant impact on the Scottish property market over the last three months since lockdown began.
From the Scottish Government’s guidance released in March that outlined property moves should be delayed, to the government’s stipulation that property viewings should not taking place until social distancing measures can be eased – for the first time since the market crash, any sort of buying, selling, or renting of property has been put on ice.
In March, when the Scottish Government released its guidance on property moves, there was an obvious impact on the volume of completed property sales, as well as a significant drop in sales volumes as a results of social distancing measures, travel bans and government stipulations.
However, the drop in completed sales wasn’t through lack of demand. In fact, there was an increase in virtual property viewings as well as waiting lists of potential buyers who wished to view properties once social distancing measures had been lifted.
There has of course been a noticeable decrease in the number of properties coming on the market since social distancing measure were put in place as sellers hold off until lockdown eases.
In a positive turn, recent weeks have seen a rise in the demand from buyers and sellers of Scottish property – especially since news that the English housing market restrictions had begun easing.
In fact, recent reports suggest that offers being agreed on properties are generally still at or above the Home Report valuation, suggesting property values remain relatively steady at present. However, there is still much speculation as to when the housing market will bounce back. Many property agencies speculate that the Scottish housing marketing won’t return to 2019 trading levels until at least 2022.
Conversely, as social distancing measures continue to ease many housing agencies predict that growth will be modest but will see a steeper recovery than after the 2007-2009 housing market crash when it remained depressed for five years. But, prices should be more stable if distressed sales are normal, however due to the predicted rise in job losses post-lockdown, this will most likely increase distressed sales and decrease house prices.
It is important to remember that the housing market is a reflection of the emergency measures put in place by the government. There is no doubt that Covid-19 will have a long-lasting legacy and any return to what we describe as ‘normal’ in the housing marketing could take some time, so it’s essential that sellers should remain cautious for a while.