What have we learned in the first month?
From talking to most of the Chelmsford estate and letting agents and our own findings, it might surprise many of you that new enquiries from homebuyers, tenants, landlords and home sellers have been at record levels since lockdown was lifted from the property market in mid-May.
There are a number of reasons for this. Firstly, we had the pent-up demand for Chelmsford property from the Boris Bounce in January and February. Next, many Chelmsford people were planning to move this spring yet were prevented doing so because of lockdown, and finally, surprisingly, an advance wave of home movers seeking to bring their Chelmsford moving plans forward because of a fear of a second Covid-19 wave later in the year.
So, what does all that look like and how does it compare to the last 12/18 months?
Data from Yomdel, the live chat and telephone answering service for a quarter of UK estate and letting agents, is able to track objective and more current information from across the UK on what is really happening. Each week, they are dealing with thousands of enquiries including:
- Seller enquiries (e. house sellers looking to put their property on the market)
- Buyer enquiries (e. people looking to view a property on the market with the intention of buying it)
- Landlords enquiries (e. landlords looking for tenants for their rental property)
- Tenant enquiries (e. people looking to view a property on the market with the intention of renting it)
They have created a rolling weekly average of those enquiries for the whole of the UK for the 62 weeks before the country went into lockdown. Then they compared that 62 week average with specific time frames, namely the 10 weeks of the run up to the General Election, the 8 weeks of Post Boris Bounce in January and February 2020, the weeks of lockdown in March, April and early May and then finally, from mid-May, the post lockdown.
You might ask why tracking estate and letting agency enquiries is so important?
Enquiries in letting and estate agencies are the beating heart of the property market – they are the ECG machine of the estate and letting agency. Of course, house price data has its place and is lauded by the national press as the bellwether of the property market, yet it takes 6 to 9 months for the effects of what is happening today to show in those house price indexes, whilst these enquiries are what is happening now.
Have a look at the data in the graph and table, it can be seen in the 8 weeks up to the General Election, every metric was down. Next, the post Boris Bounce saw house seller and house buyer leads increase yet note how low tenant enquiries were (hardly any change from the run up to the election), everything dipped during lockdown as expected, yet look at all the metrics post lockdown … amazing! (e.g. if a number in the graph/table below is say -25%, that means its 25% below the rolling 62 week average, yet if it were +20%, then that would mean it would be 20% more than the rolling 62 week average)
The numbers speak for themselves!
So, what is happening in the Chelmsford property market? Well, there is plenty of activity in the Chelmsford property market, yet that doesn’t mean everything is back to normal. Enquiries are an important metric, yet another way to judge the health of the property market is to look at the number of property transactions (i.e. people moving).
Now the Land Registry data isn’t quite as exhilarating, yet it is less volatile. Nationally, it shows that property transactions were at their lowest level since its records began in April 2005. The seasonally adjusted estimate of UK residential property transactions in April and May 2020 was 90,210, 53.4% lower than the 193,500 transactions of April and May 2019. Again though, this was because of the restrictions on moving during Covid-19. The stats for Chelmsford are still to be released, yet rest assured I will share them in due course.
Looking again at what is happening now, when I look at the number of properties for sale…
243 Chelmsford properties have come onto the property market in the last 14 days alone, and of those, 29 are already sold subject to contract
So, what of the future of the post-lockdown Chelmsford housing market? While a stern recession seems almost guaranteed, a housing market crash is not. Many newspapers are predicting property values to fall in 2020, then rise reticently from the ashes in 2021. The fact is, nobody knows. The property market is driven a lot by sentiment. Buying a home is not like buying stocks and shares – it’s a home to live in … and those Chelmsford landlords who are looking for an investment opportunity, often let their heart rule the head (again sentiment) when investing in property.
Property always has, and always will be, a long-term investment. Many of you Chelmsford people reading this, especially potential Chelmsford first time buyers, have been putting off buying your first home because of Brexit, now its Covid-19, and in a few years, it will be something else. There will always be ‘something else’… and you could get to your 50’s and 60’s, still renting, waiting for the ‘next thing’ to pass before you buy … and end up buying nothing.
Nobody knows what the months or years ahead will bring … yet what I do know is, people will always need a place to live. Please let me know your thoughts in the comments. Tell us what your experiences are as a Chelmsford landlord or homeowner, tenant or buyer so we can all learn from each other.