The London property market update – May 2020

We continue to work hard for our clients, offering full support and updates for tenants and landlords throughout the Covid 19 pandemic. While our offices are closed, each has a full-time member of staff working from home who can be contacted either by their usual email address or office telephone number. Our property management, accounts and administration teams also remain fully operational, working from home, and they will continue to do so throughout this crisis.

So, while we are certainly living in extraordinary times and our working practices have changed dramatically during the coronavirus outbreak, we have pulled on the many resources that technology affords and operating without significant interruption.

People still need to find rental accommodation and, in particular, we have been finding rental homes for NHS workers and other key workers. And while, of course, the number of new lets being concluded is way down, the upside for many landlords is that around 75% of current tenants who were thinking of moving, have renewed their existing tenancies, preferring to sit tight through the lock-down period.

Many landlords are continuing to receive their rents as normal thanks to the government’s furlough scheme, aimed at helping employees retain their jobs to keep the economy going, so the number of tenants struggling to pay is smaller than we had initially feared. If you are a client reading this and would like more specific information about how you may be affected, see our question and answer update.

If a tenant is having financial problems, we are liaising with them individually to find a reasonable solution. If this happens, we ensure due diligence by looking into their circumstances, working with them to manage the problem and find a solution in the longer term in line with Government recommendations. The tenant may need to negotiate a lower rent, organise a repayment schedule or they may even have to leave the property, but whatever their individual circumstances, we aim to find a satisfactory solution. Eviction proceedings have also been banned during the pandemic and more information about this can be found here.

Our new series of property investment webinars

Of course, communication is more important than ever in times like these and one of the new ways we are offering advice, information and support to clients is through a new series of webinars, examining how investors and landlords can navigate their way through the current situation, and these will be in place of our planned international property investor events.

The first, held in conjunction with leading property developer Barratt London, looked at the impact of Covid 19 on the London property market. “Covid 19 – opportunity in a crisis” and took place on April 29th offering a full market update analysis of previous global recessions and subsequent opportunities and the long- term outlook for London property investment. If you missed it, you can request a link by emailing webinar@benhams.com

Going forward, we are planning to carry out more of these webinars, enabling us to enhance our support for clients. The next webinar ‘Crisis creates opportunity’ is on May 6th and will be hosted by our London Directors and Doris Tan, our Regional Director in Singapore. Doris has a wealth of experience and a strong client base in Singapore and other international regions who are keen to get an honest update about what is really happening in London property during the pandemic. Anyone who wants to tune in, can find more information and register here.

More virtual viewings for applicants

We are carrying out many more virtual viewings at the moment. These videos are being put together by our staff so they have a very realistic feel to them – no professional lighting, no irritating music! Each viewing is simply a walk around the property so that applicants can see exactly what it has to offer and it’s as close to the real thing as we can get! We have a lot of new applicants who have registered online showing their interest for when the lock-down period eases.It has been particularly fulfilling to help some NHS staff who have benefited from seeing a virtual tour of a property then move in with ease. This was possible because our branch staff live locally to our properties and were able to do everything needed while respecting Government guidelines on safety and social distancing.

Property management

We continue to maintain a full property management service for clients using our regular, trusted contractors, all of whom operate strictly in accordance with government guidelines. If possible, we are also offering advice to tenants by phone for simple property maintenance issues, enabling them to be more self-sufficient. This could range from advice on changing a lightbulb to fixing a washer on a tap and it will give tenants more control while bringing cost savings for landlords.

Property investment in London

We are still receiving sales enquiries from investors looking to purchase off plan new development properties in London and there is a clear understanding that this crisis will end and normal life will resume at some point. We are carrying out six or seven video conferences a day and although of course there has been a huge drop in demand we are still concluding transactions, ranging from the purchase of a £300,000 apartment in East Ham to a £2.9million apartment in Hammersmith. Again, video tours are proving to be invaluable.

In particular, we are seeing some Chinese investors return to the market, making up for lost time. With house prices flat for some time prior to the pandemic, there is considerable pent up demand from investors and we expect to see enquiries from overseas buyers increase in particular before the additional Stamp Duty of 2% is introduced in April 2021.

We also expect owner occupiers to take advantage of current all-time low interest rates, recognising that in terms of affordability there is unlikely to be a better time to take out a mortgage.

Looking forward

Flexibility is key in the current situation and we are continuing to react quickly as the situation develops. We are liaising regularly with all our clients and working with tenants who have been furloughed and taking into account their individual circumstances.

It looks like once the doors do re-open in London, we will be well placed and ready to help people move but we will definitely need more properties for rental on our books, to help with pent-up demand. Anyone with a property becoming available during the summer months should contact us now.