Post COVID Lockdown Market Update

Mike Cole

Most people are aware now that the post lockdown market for both sales and lettings since agencies were allowed to re-open has seen a remarkable bounceback. Prices have held, activity has increased and, in our own case at Imagine, we have simultaneously had our best ever month of newly agreed sales and newly agreed lettings since we started trading.

All of this is highly encouraging, not least because the housing market is such a key component of our economy and if it were to slide it would have far wider-reaching consequences than just for those directly employed in it.

More open to debate is whether this bounceback will hold or whether it’s a case of pent up demand that will soon evaporate, a question to which I have a very clear viewpoint.

Firstly, yes, some pent up demand must have logically existed that has done no harm helping us get back on track. But we are 6 or 7 weeks down the line now and it’s still going strong so it has to be more than that. In reality, many businesses have come out of this better than they imagined with a combination of Government support, ingenuity, initiative and good old fashioned bulldog spirit. However, the question remains, can this hold the market in the months ahead?

There are two major threats as I see it;

  • A second wave that leads to a new lockdown.
  • Large numbers of redundancies as furlough ends.

The former I don’t believe is an issue, which might be a contentious viewpoint, but my reason is fact-based. Of around 44,000 UK deaths in England and Wales that have been attributed to COVID at the point of writing, only 524 were on people aged below 65. And, of those, a high percentage must relate to those with pre-existing conditions. This disease in its current form is not the massive death threat it was originally feared to the average aged, healthy working population. 

Knowing our economy couldn’t cope with another massive lockdown, and knowing those at risk can be better shielded, such an option must be an absolute last resort next time around for our Government. My view is future lockdowns would be very localised and the bulk of the focus would be on protecting the elderly and vulnerable who are clearly the ones we need to worry about. (This was written prior to the Leicester scenario where exactly this has happened). The younger people can be back at work and keeping the country running.

The latter of the two points is a greater risk, in my view, particularly in the industries worst hit. A 3-month sabbatical has been painful for pretty much all businesses but, in the main, is survivable, coupled with the reasons I described earlier. 6 months is a different equation though and entertainment, travel and hospitality etc must be under intense pressure with job cuts seemingly inevitable. In large enough numbers that in turn impacts on consumer confidence across the board, including on property. 

So my suspicion is the market will ease to a more natural level in the coming weeks as people remain a little wary and probably hold at that. If the Government support can limit redundancies to a manageable level  (I appreciate it’s awful for anyone affected directly but I’m reviewing the broader picture here), then we could see 2021 as being a very positive year for many businesses and I really don’t buy into some of the gloom and doom merchants and reporting. I do also understand retail has a massive problem, but that existed pre-COVID and it was already clear that if the rules aren’t quickly changed to make the playing field between online and High Street fairer, it was game over for many of the High Street businesses that rely on footfall.

In the meantime, I’m very fortunate to be in one of the business types who could survive this crisis in pretty good health and hugely sympathetic to those who have been less fortunate. 

I wish you all the very best finding ways to adapt, but for the majority who do, I suspect this won’t have ultimately been anywhere near as bad as was originally anticipated. Onwards and upwards…