What was happening in the property market prior to lockdown and social distancing measures?
The property market in East Central Scotland had an exceptionally bright start to 2020.
At Neilsons, from 1st January 2020 to 31st March 2020 we recorded an increase in residential property sales of 7.1% compared to the same period in 2019. In addition, our average selling prices during this period were up 2%.
There was good news for buyers too and our activity acting for purchase clients was hectic.
Mortgage approvals hit a six-year high in the UK before the Coronavirus hit.
At Neilsons, we also recorded an increase of properties coming to the market between 1st January 2020 to 31st March 2020 of 12.7% compared to the same period in 2019. In March alone, we recorded an increase of new properties to market of 23.7% compared to March 2019.
There was a lot of stock coming to the market as we hurtled into Spring to cope with buyer demand.
Sellers seemed largely undeterred when it came to marketing in March, as they recognised that in the event of the lockdown that was fast approaching that it was important to be on the market to be seen by house hunters compelled by the lockdown to browse online and they were right. In the past two weeks alone, Neilsons’ Facebook reach has increased by over 200%.
The reality is that the increase in properties coming to market in March figure should be even higher, too.
We have a substantial number of properties ready to put on the market once the lockdown restrictions have been uplifted. These properties that were due to come to market in late March have simply been held back for now due to surveyors being unable to attend the properties in person to carry out the Home Report which is a legal requirement in Scotland. We expect that once restrictions are lifted, there will be a flurry of new properties coming on to the local property market.
Other top firms are reporting same.
The reported collapse of the AirBnB market may also bring more properties out of the short-term rental market and on to either the open market for sale or long-term rental market.
What has happened in the property market since lockdown and social distancing measures?
The social distancing and lockdown measures imposed are essential to combat the virus and strict observation of these measures is essential if the Nation is to stop the spread of the virus and support the NHS.
Our clients have of course fully supported the lockdown measures and yet activity in the property market has continued with buyers and sellers remaining incredibly resilient and adaptive to the new way of living and conducting business in these unchartered times.
Our statistics show that despite the very necessary constraints imposed by the lockdown both buyers and sellers are adapting to find new ways of conducting the process of buying and selling in this strange new world.
We are a top three selling ESPC member firm and currently represent several hundred active clients in the East Central Scotland region. Whilst some headlines may have you thinking to the contrary, the reality is that despite entry dates being postponed for the time being due to required social distancing measures in order to quite rightly protect public health, activity in the market remains very productive.
Last week, during the first week of lockdown and social distancing measures in the UK, we received 16 Notes of Interest on properties we were marketing for sale. In addition, 16 Offers were received with 13 of these Offers at or above Home Report valuation. This means that 81% of Offers received for properties that we are selling last week were at or above Home Report valuation.
Our Solicitors and Paralegals were exceptionally busy representing buyers too. Collectively, they submitted 34 Offers for properties last week, of which 26 were at or above Home Report valuation and 18 Offers were accepted. This means that 76% of Offers submitted for properties last week were submitted at or above Home Report value and 70% of Offers submitted by Neilsons for properties last week have been accepted.
For now, it is clear to see that the activity in the property market appears undeterred despite the necessary restrictions.
Firms that have adapted well by going virtual in recent weeks, have been providing an exemplary service to their clients.
Going Virtual
The Firm of Neilsons Solicitors and Estate Agents have always been at the forefront of harnessing new technology in the work that we do. To ensure that we can maintain the service that our clients are expecting we have adapted the available digital technology and are now ready, open and willing to operate in what is the temporary new normal for the property and legal sector in Scotland.
Technology has always played a part for us and Neilsons have often been at the forefront of innovation – just last November we received a Commendation Award for Innovation at the Law Awards of Scotland, presented by the Law Society of Scotland.
In recent years, we have developed innovative features like our client sales portal (unique to each seller) and have been quick to adopt electronic Anti-Money Laundering checks which enable clients to quickly and securely upload their identification, address and bank statement documentation online in the comfort of their own homes rather than coming into the office unnecessarily.
Now, what once seemed like nice optional extras for many firms has become, almost overnight, a necessary part of the property and legal landscape for firms that wish to operate to their best potential during social distancing and offer their clients the very best experience in testing times.
Neilsons’ focus over the last few weeks has been to ensure that our clients who are selling or propose to sell in particular are, wherever possible, able to operate in a “virtual environment”, and we have available new tools and services to boost their marketing and interaction with viewers whilst operating within the lockdown and adhering to social distancing measures such as by offering virtual viewings with our recommended presentation tips and advice.
Innovating and rethinking the way we work has been crucial. We are fully focused on delivering tools that will assist our clients to market virtually during these unusual times.
In addition, we have added extra staffing resource in our private client department to cope with the increase in enquiries for Wills and Powers of Attorney lately. The Law Society of Scotland have recently released new guidance that enables us to observe clients signing their Will and/or Power of Attorney by video call. This ensures that despite the fact that we cannot meet with a client in person to witness Deeds, we can still prepare a valid Will and / or Power of Attorney for our clients. You can read about this in more detail here.
It is clear that all property and legal firms will need to accept the fact that, for everyone to remain safe, what was previously done in person will need to be done virtually for the foreseeable future all the way from virtual appraisal and valuation of properties (which we are currently offering to a wide range of sellers) to the conclusion of the deal.
Our Purchasers are obviously prevented from viewing properties in person by the current essential restrictions. It is simply not safe to do so. Since the lockdown, we have been submitting Offers “subject to satisfactory viewing” when it is safe to do so. We have had several Offers accepted on this basis this week.
Our pro-active transition during these unprecedented times has also been boosted by our strong profile on social media. We have long recognised the power of video as an impactful marketing medium and have innovated quickly with sellers so that we are adapting well to the constraints imposed on the market. As previously referred to in this article, our Facebook reach has grown at a remarkable rate of over 200% in the past two weeks.
The virtual tools are designed to assist agents, as well as improve the experience for both seller and buyer. Even once the government restrictions have been lifted, we firmly believe we will see a shift in consumer behaviour and how people choose to interact.
The tools that we are introducing we believe will form a big part of our future marketing recommendations for clients, which is a positive.
What does the future hold for the East Central Scotland property market this year?
Nobody has a crystal ball unfortunately and making bold claims about the future of the market would be both bullish and foolish at this early stage however there is some evidence to suggest there is light at the end of the tunnel for the property market.
Firstly, Edinburgh has been deemed to be in a strong economic position and is predicted to be the top city – outside of London – to make a fast-economic recovery following the disruption to services across all industries. It is estimated that 40% of Edinburgh can work from home in this current climate, compared to other cities where it could be half that figure (20%) and Edinburgh is boosted by an above-average number of high-skilled workers in the financial, legal and tech industries. You can read more about this on the Evening News website here.
Secondly, we have evidence that we have illustrated in this article that demonstrates the activity in the market in East Central Scotland is proving resilient at this early stage with buyers and sellers undeterred. We also have a considerable number of properties due to market once restrictions are lifted and surveyors can attend their properties to produce the Home Report.
We are also still processing many virtual viewing requests. Unfortunately, not all firms are offering this service at present and some appear to have simply shut up shop until face to face viewings can recommence. Some firms are not even recording any viewing requests received at this stage. This goes against Neilsons core value of client service – we are here to service our clients needs whether the conditions are good or problematic. For every problem, there is a solution and we are certainly here to help.
Lastly, with coronavirus abating in China where it originated, the Chinese property market has sprung back into life with sales in 30 major cities tripling as restrictions have been lifted, surpassing the average levels in the final quarter of 2019. However, the progress of the Chinese property market this year depends on development of the Coronavirus condition.
Public health in the UK is of course the top priority now for everyone and restrictions are required to slow the spread of the virus. There is nothing normal about day to day life for any individual in the UK and any activities which may involve contact must be postponed for a future date to minimise social interaction and limit the spread of Coronavirus.
As such, we do not know yet when things will return to a semblance of normality, when we can re-open our offices, permit face to face viewings or settle postponed transactions. However, Neilsons have adapted well to service strong levels of seller and buyer demand and have innovated proactively and quickly to assist a wide range of clients in the current market. Anyone thinking of selling and or buying in the future should use this present time to research as much as possible and we are on hand to help with that, should you require assistance.
We hope you all stay safe in these challenging times.
This too, will pass.
We are here for you, if you need us.
Book a free telephone consultation with Neilsons online here