Q&A for property business in lockdown
We provide you with answers to questions for staying open in property business during lockdown. Viewings, contracts, mortgage and more
The Coronavirus pandemic, which has swept across continents, is not only affecting major economies in the world, but is also having a crushing impact on housing, especially in the UK.
With the mandated lockdown and various social distancing measures put in place to curb the spread of the virus, it is almost impossible for sellers, buyers and renters in the housing sector to arrange physical viewings.
With the odds clearly not in favour of the housing sector, many homeowners and prospective buyers/tenants are still open to buying, renting and selling properties during this season.
We understand the uncertainty, which is why we have put together answers to the questions (Q&A) we've frequently gotten from the market.
Q:What does this Complete Lockdown Really Mean for Buyers and Sellers?
This simply means that social distancing guidelines and self-isolation policies take priority. Buyers, sellers and agents have ceased all physical viewings. With fewer domestic buyers and a scarcity of overseas buyers, transaction levels are likely to fall sharply in the short term if no actions are taken.
Q:What are the Alternative Ways to Market a Property?
With more and more people practicing social distancing and preferring to stay at home, it can be quite challenging to market a property the conventional way. That is why many estate agents are leveraging on the many marketing alternatives available, with virtual viewings topping the list.
Technology is an incredible advantage that can help the housing sector survive these chaotic times. Instead of having physical viewings (which are already banned by the way), estate agents can offer clients VR interactive property tours using various virtual platforms such as Cupix, Matterport, EyeSpy360 and so on, or a video tour of the property . These can easily provide a virtual walk-through of the property for clients.
Q: How popular are VR property viewings now?
Guy Bradshaw, director and head of sales, London at UK Sotheby’s International Realty, explains: ‘We are offering video tours where applicable. Whilst this will have an impact on viewing numbers, the digital age means that people can still do their research, online viewings, video calls, etc., as appropriate’.
In Medway, Kent, RedDoorHomes has already produced video tour for every property listing: individual viewings are also bookable per time slot just like 'real' viewings would be, with a member of the sales team virtually 'attending' each one.
Zoopla's CEO Andy Marshall said in interview that virtual viewings have seen a 215% increase in traffic. He also expects virtual tours to become the new norm even after the virus is under control.
Q: What to do if Property is Already on the Market?
According to official directives, ‘If your property is already on the market, you can continue to advertise it as being for sale, BUT you should not allow people in to view your property’.
However, agents can conduct virtual viewings.
As Jeremy Leaf, a North London estate agent and a former RICS residential chairman stated; ‘physical viewings were down 50 to 75 percent even before lockdown and he would expect the same at this time of year’.
Similarly, estate agent, Knight Frank has since revealed similar findings: physical viewings started declining since the government's tighter restrictions on movement. And, unsurprisingly, virtual viewings are on the rise. So, if property is already listed for sale, your best option is virtual viewing.
Q: What Do I Do If Clients Have Already Exchanged Contracts?
If contracts have already been exchanged, you don't need to fret. The UK Finance states that lenders have agreed to provide a three-month mortgage offer extension to homeowners affected by the pandemic who have already exchanged contracts. What this means there is the option to move at a later date.
Q: What About Mortgage?
As a buyer looking to get mortgage, they may not find many options at this point. Due to the impact of Covid-19, some lenders are even beginning to withdraw mortgage offerings, with some major lenders such as Halifax refusing to offer mortgages with a loan-to-value (LTV) of more than 60%. What this means for buyers is that qualifying for a loan will require a minimum 40% deposit.