Words: Adam Sutton, Adam Sutton Estates
Real estate is one of very few sectors to have weathered the storm of the pandemic.
Of course, it hasn’t all been smooth sailing for us property professionals but we are one industry that has experienced minimal disruption during both lockdowns. My colleagues and I even saw a business boom and have continued to showcase our property sales though the wonders of modern technology and social media – new buyer inquiries are up almost 50% and we have even experienced a surge in the number of people following us on Instagram to watch our property video tours.
Yes, it has been a good period for business but the strong property market has been good for property owners, especially those looking to sell their properties, too.
At the height of the first national lockdown, UK property values increased 2.5% according to recent data from the Land Registry and the UK housing market has remained buoyant since. In fact, we have experienced a post summer lockdown bounce.
House pieces across the Liverpool City Region have increased this year and they remain strong. The government’s stamp duty freeze is also motivating people to buy and take advantage of potentially huge savings. It is particularly appealing to first time buyers. We have also seen an increase in the number of people from outside of the city buying properties as investments.
The demand has been so great over the last couple of months that there are just not enough properties for sale.
But this boom isn’t going to last forever.
Earlier this month I did various press interviews about the inevitably of a financial downturn. I said that house prices plummeted by an average of 15% during the 2008 recession. We’ve seen property prices fall in the aftermath of every major recession and all the indications are that the economic climate is going to get even worse in the months ahead. Some people may have thought I was scaremongering but with a recession worsening, mortgage holidays being stopped by lenders, businesses closing and the consequential rise in unemployment, the signs are worrying.
Lloyds Banking Group, Knight Frank and Santander have all warned that plummeting house prices are expected. Lloyds said the worst case scenario was 20% over three years, while Knight Frank predicted a slump of 7% this year and Santander predicted a 6% drop.The outcome of Brexit negations could lead to “further uncertainty and dampening growth”, the bank has warned.
The consensus across the property sector is that house prices will fall. I think it is right that people are armed with the facts and that’s why I’ve spoken out.
It is a gloomy outlook but current valuations are not sustainable amidst a global pandemic and what could be the worst recession in history.
Some people are worried about letting people into their homes with Covid-19 rates rising again and that’s why we are investing a lot in selling homes online with virtual tours and extensive video footage of the properties we sell. There are ways to sell without opening your front door. My advice to anyone looking to maximise profit on a property sale is to sell now. We are always available for advice too.
Adam Sutton Estates is on Instagram @AdamSuttonEstates