Property market update

Welcome to the June edition of the Greenstone newsletter where we share the latest property news and guidance. It's been five weeks since restrictions were lifted in the property market so we take a look at activity so far. The sales market has seen a spike in property searches and at Greenstone we've had a steady flow of new listings. The lettings market has seen a strong bounce back with rental stock and property demand surging showing great resilience.

Elsewhere we share new compliance laws to come into affect for landlords and finally how our property management services can support you.

We hope you enjoy this months edition. We also provide property tips, insights, and updates on our social media channels which you can click to follow at the end of our newsletter. As always, please get in touch if you have any property queries.

Best regards

Lewis Green, Director

Sales Market Activity

With an estimated £82 billion of property transactions on hold due to coronavirus, the Government announcing in the middle of last month that operations could resume, with the appropriate measures in place, was welcome news to many.

The immediate effect of the reopening of the property market could be seen clearly on the property portals – with a distinct spike in searches for properties the day after restrictions were lifted. Rightmove recorded over 5 million visits on 13th May and reported that sales demand doubled from Tuesday (when restrictions were still in place) to Wednesday.

The spike in property searches can be attributed to the many people who have had to put their property search on hold due to coronavirus and are now looking to move quickly in order to avoid their own chain collapsing, or just to take advantage of current circumstances.

And in return, we at Greenstone have seen a steady flow of property listings from a one bedroom flat at £400,000 through to a 3 bedroom apartment in St John’s Wood High Street for £1,215,000: https://www.greenstone.com/property/charles-lane-st-johns-wood-nw8/

A shift in attitude is also noticeable in terms of the types of mortgage which are being searched for – with a move away from remortgage loans to purchase mortgages. Mortgage technology firm Twenty7Tec reported a 27% week-on-week increase on 17th May for the volume of searches being completed.

“We are starting to see significant volumes return to the market – with searches for purchase mortgages in particular rapidly gaining pace. Searches for purchases are now at 44 per cent of pre-lockdown highs, up from lows of 15.6 per cent in mid-April” explains James Tucker, chief executive of Twenty7Tec.

Miles Shipside, Rightmove director and housing market analyst, said: “The traditionally busy spring market was curtailed by lockdown, but we’re now seeing clear signs of returning momentum, with the existing desire to move now being supplemented by some people’s unhappiness with their lockdown home and surroundings.

“Some may be unable or unwilling to move now, but those who are ready to take the plunge have jumped immediately into action.

“Unique enquiries on property for sale doubled from the day before, though we expect consistent momentum to rebuild over several months rather than weeks.

“With no new seller asking price data it’s too early to comment on price movements, though high demand is needed to support a stable market.

“If there are attractive lower deposit mortgages available it would help sustain the recovery in activity. The industry has been caught by surprise, as we were all expecting the housing market to stay closed until at least June.”

Lewis Green, Greenstone adds “ Garden flats or apartments with balconies or outside access are in most demand currently as buyers now look for space they can work in and enjoy, while spending longer period at home over lockdown and expecting less holidays in the future.

The Lettings Market Surges Upon Reopening

Due to the nature of lettings, the market tends to be much more agile and recover more quickly than its sales counterpart during times of instability and the market is once again showing its resilience as it surges following the lifting of lockdown restrictions.

We are receiving lots of inbound enquiries, although it seems most applicants have only now given notice and are looking in August. We are finding tenants are looking to relocate closer to work to reduce their travel time and exposure on public transport and moving for more suitable properties now they are spending more time at home.

Analysis of the largest property portals has shown that rental properties coming to the market has surged by up to 44% in some parts of the UK as landlords are keen to get their properties back onto the market. The research conducted by Howsy shows that the day after restrictions were eased the market jumped back into action, with London in particular seeing a huge increase in listing volumes.

Callum Brannan, founder and CEO of Howsy, said: “Many in the rental sector will be breathing a sigh of relief with such immediate green shoots of market activity returning to a number of cities following an ease in lockdown market restrictions.

“Of course, other pockets of the market will take longer to see this positive trend emerge as agents and landlords find their feet operationally.

“We’re certainly not out of the woods yet and the ongoing financial and health implications facing many tenants and landlords will continue to be an obstacle. However, now that we as an industry are able to facilitate them on a greater scale, we can at least start to rebuild momentum in the sector.

“Now, it’s vital that landlords receive the support and protection they need from us as an industry, to ensure confidence in their investment and to maintain a suitable level of rental stock to meet demand from tenants who rely on these homes in order to live.”

Lewis Green adds “Enquiries are steady and properties are being let, but its not the usual June market we are used to, but it’s going in the right direction"

“We are able to focus on our serious applicants and coupled with giving our clients properties the right exposure we are able to maintain a steady flow of lettings agreed."

New Complaince Laws For Landlords

As members of ARLA we receive up to date legislation and compliance procedures.

As you may have heard The Housing and Planning Act 2016 allowed Ministers to introduce electrical safety standards for tenancies in the private rented sector as from 1^st July

This means all newly let properties will need an EICR certificate. Here is a simple breakdown of the legislation :

1. All New Lettings that complete on or after 1^st July need an EICR Certificate

2. All Renewed Tenancies by way of Renewal Memorandum will also need an EICR if renewal date is on or after 1^st July 2020

3. If the tenancy is extended by way of a Periodic Tenancy then :

(A) Contractual Periodic Tenancy – is deemed as same tenancy an not required

(B) Statutory Periodic Tenancy – is deemed as a new tenancy and IS required.

1. And All tenancies regardless of when created will need an EICR cert from 1^st April 2021

2. EICR Reports last 5 years

3. AN EICR Report is a test of the electrics and installation of the fixed electrical equipment, not appliances.

4. We can arrange an initial inspection and report for £120, but note it may require further works.

Please see the Guide provided by ARLA for even more information which you can download here.

Property Management

Now more than ever it is clear that a property management service is paramount for Landlords and I am pleased to say our Team as Greenstone has stood up to the mark.

Over the Coronavirus lockdown period we have had to manage the concerns of Tenants affordability, Landlords loss of rent, Gas Checks not completing due to self-isolating tenants and distinguishing between urgent and non-urgent works or repairs.

Our Maintenance team have been outstanding, always fulfilling guidance and respecting tenants concerns.

With the ever changing tenancy laws, the delicate conversation with tenants over rent payments and being able to act in a professional manor while having a great knowledge of the law, we at greenstone believe our service is not a luxury, but a necessity.

We have therefore decided to offer this service, with a special offer to all Landlords, for all new tenancies from now until the end of July, of 10% off our full fee.

Additionally our entire commission, for the period of the letting will be collected as we collect the rent, no upfront letting or management fee.

And for extra peace of mind, we will provide you with Rent & Legal Guarantee cover, for the duration of the term !

Please contact our Director, Lewis Green, for a no obligation chat to discuss this fantastic offer on DDI 0203 7800 1999 or lewis@greenstone.com