Vaccine injects new life into housing market

Just when you thought the housing market was beginning to calm down... along comes a likely vaccine for Coronavirus.

One of the country’s top estate agents says the prospect of a Pfizer vaccine possibly rolled out in the coming months has given a jab to the housing market just as it began slowing for the festive season.

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: "It’s very early days but the announcement of a possible Covid-19 vaccine has given fresh impetus to buyers and sellers making a last-ditch attempt to take advantage of the stamp duty holiday and complete transactions before the end of March. 

“Many are aware that delays in arranging mortgages, surveyors, searches and conveyancing due to the busier-than-expected post-lockdown uplift has meant meeting that deadline could be touch-and-go even if agreeing terms in the next few weeks.

"On the other hand, the likelihood of a vaccine sooner rather than later may perversely stiffen the resolve of some sellers not to accept low-ball offers so agents will need to brace themselves for a bumpy ride.

"Previously, post-lockdown pent-up demand and the stamp duty concession contributed to a strong improvement in sales activity during July, August and September. Since early October, when the prospect of further restrictions and another lockdown increased, new buyer activity declined. However, we have seen little evidence of previously-agreed sales being renegotiated or buyers and sellers withdrawing from transactions."

Meanwhile a leading market analyst - Tom Bill, head of residential research at Knight Frank - says if the vaccine works and arrives in the near future, some property trends of recent months could unravel. In turn, that could present opportunities for shrewd property investors.

“Demand has grown for properties with outdoor space, which has benefitted the country house market as well as more suburban locations. In broad terms, house prices have also performed better than flat prices for the same reason” he says.

“The arrival of a vaccine won’t, of course, produce the mirror image of this trend. That would be as simplistic as saying Covid-19 is shrinking demand in London and other big cities, reversing centuries of urbanisation. 

“The truth will not be as black and white in a slow-moving, sentiment-driven market where other factors such as affordability are at play.

“However, for investors who believe the vaccine news will remain positive, there is one property type that has under-performed in 2020 – the large flat. This is due to the fact demand for larger flats has more readily switched to houses. That, to some, will signal a buying opportunity.”