Flats are out, gardens are in - what homebuyers want post-lockdown

Article featured in Moneywise:

House sales and prices are still dropping. Estate agents predict rising demand for properties with gardens over the next two years because buyers are sick of the coronavirus lockdown. The pandemic looks as if it could permanently change the housing market, with more people looking to leave urban areas and move to the countryside, according to a survey by the Royal Institution of Chartered Surveyors (RICS). RICS says 81% of estate agents think there will be an increase in demand for properties with gardens or balconies over the next two years. Nearly three-quarters (74%) predict an increase in demand for homes located near green spaces, while 68% believe properties with greater private and less communal space will become more desirable.

Estate agents also believe there will be a fall in demand for homes in tower blocks and properties located in urban areas. However, the majority expect no change in the desirability of homes located near transport hubs such as railway stations.

Simon Rubinsohn, RICS chief economist, says: “There are already signs that those looking to buy a house are responding to the conditions created by the pandemic by seeking out properties with gardens or balconies and nearer green space.

“These and other similar features are likely to increasingly command a premium over higher density urban locations according to respondents to the survey.”

RICS also found that estate agents are at their most pessimistic in the last 10 years. It says a balance of estate agents reported lower house prices in May compared with 22% in April - making it the weakest monthly figure since 2010. The near-term outlook is also not looking good, with 16% of estate agents expecting house prices to fall rather than rise over the next year. The figures echo those from Halifax and Nationwide released earlier this month which show house prices fell in May.

Even though the housing market was reopened on 13 May following lockdown restrictions, sales are still falling. A net balance of 35% of estate agents said sales were down. The housing market was brought to a grinding halt when the lockdown was introduced in March, with estate agents, buyers and surveyors banned from visiting properties. The Government has now eased these rules, allowing the housing market to start up again. But this has not gone smoothly.  Lenders are once again pulling mortgage deals for buyers with small deposits, following a surge in business after lockdown restrictions were eased.

Despite the problems buyers and sellers are facing, there appear to be some signs of recovery in the housing market. RICS says 5% of estate agents reported a drop rather than an increase in new buyer enquiries in May. This compares to a record low of 94% of estate agents reporting a fall in buyer enquiries in April.