As the number of cases falls and social distancing measures are relaxed, there is a palpable sense that we are entering a new phase of the coronavirus pandemic. There is a risk, of course, that as the lockdown restrictions become less severe, the UK will see another spike in infections. However, for now, there is optimism that we are on the road to recovery.
Of course, regardless of whether there is a second spike, it would be wrong to assume that things will simply go back to the way they were at the beginning of the year. The term “new normal” is being used to describe the lasting impact the pandemic will have on society. The property sector is no exception.
Since 13 May, the easing of social distancing measures has ensured renters and buyers can once again move property. At the same time, lenders have been able to undertake onsite valuations. Demand and activity are both returning to the market, though it will be sometime before we see transaction figures reach their pre-coronavirus levels.
That said, it will be interesting to observe the prime central London (PCL) market in the second half of 2020. In the first 11 weeks of the year, there was a 30%increase in the number of property sales worth over £1 million taking place in the capital, when compared with the same period in 2019. The question now is whether this momentum will return as lockdown measures are relaxed over the coming months.
The coming months
In the immediate future, we should expect a period of readjustment. When it comes to PCL real estate, the gap between asking prices and exchange prices has been widening as a result of the current pandemic. According to Knight Frank, the average sale price in April was 94% of the original asking price, which was down 3% from the start of the year.