We often describe a year as having two halves but 2021 has already had two very different quarters. We remained open, working behind closed doors with virtual viewings for Quarter 1. Business was busy. April was a similar month but with the re-start of physical viewings on May 10th volumes of both seller and buyer enquiries have hugely increased. Like most industries, property is seasonal, and summer is usually a relatively quiet time for the market. However, to date this summer we are not seeing the normal type of seasonality and we continue to be very busy with both buyers and sellers.
Quarter 2 2021
As was witnessed in Quarter 1, the lockdown restrictions clearly did not affect buyers. Both agents and buyers were accustomed to virtual viewings, so business continued seamlessly. With the re-starting of physical viewings in May, we have seen a number of different seller and buyer behaviour patterns emerging. As a lot of people continuing to work from home, there is much greater flexibility around viewings. Daytime viewings have become much more normal rather than evenings and weekends.
We have also seen a huge growth in digital enquires, with queries being received 24/7 from sellers and buyers alike. This is clearly being driven by the shift to digital in all aspects of our lives over the past 18 months. The impact of this is also a driver behind the lack of seasonality this year. People are holidaying at home and remaining switched on to many more aspects of their lives than they would have in previous years.
There is still no evidence of supply and demand coming into balance in the short / medium term and this is obviously impacting prices particularly for family homes.
Highlights & Concerns
The shortage of properties for sale is having a huge effect on the entire market from first time buyers to those who are looking to trade up or trade down. People looking to trade up or down are hesitant about putting their current property on the market until they have found a suitable new home, which is proving difficult for most because of the lack of choice. For those lucky enough to find a suitable property, their bids are often not considered because they haven’t sold their own home and therefore, they are not in a financial position to proceed immediately.
Hence without some form of bridging finance being available this is going to continue to be a major issue. It will continue to have a negative impact on the number of properties coming to the market. If people were confident that they could easily find a suitable new home quickly then they would not be so hesitant in putting their own property on the market. However, as it stands most do not wish to take the risk of selling first in case they end up in a situation where their own is sold and they haven’t been able to find a new home.
On a positive note, the severe limitations that were witnessed over the past year on construction have eased and it is full steam ahead. The impact of this on the supply chain is already starting to be felt. The reluctance many homeowners had to sell in the middle of a pandemic has also dissipated. Both factors are encouraging.
What lies ahead?
While supply will continue to be an issue over the coming months activity levels continue to defy predictions. Prices, transactions, and mortgage activity are all up. In the first half of the year, mortgage approvals were well ahead of the same time last year. In particular, first-time buyers’ approvals have surged ahead. These are significant factors signalling a robust pipeline for drawdown in the second half of the year as hopefully more properties become available.
Although demand for all types of property has been strong right through the pandemic, where we see the highest demand is for 3 - 4 bed houses with gardens. In addition, we have noted an increase in investors purchasing apartments. This is probably not surprising given the negative return being received on money sitting on deposit.
In a year that started like no other, 2021 will continue like no other. We expect the coming summer months to continue to be busy with transactions and viewings. Buyers, sellers, and agents have adjusted very well to the more personal and streamlined private viewing approach we have adopted, and this will continue. For now, larger open house viewings are a thing of the past and may well remain there.
The above commentary is based on information available at the time of publication. Any opinions or assumptions are those of Quillsen and for example only. It is the responsibility of an individual to verify them.