Back in mid-April an independent report suggested that estate agents, along with cafes and … [+]
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Back in mid-April an independent report from GlaxoSmithKline Chairman Sir Jonathan Symonds and Conservative Peer Lord Gadhia suggested that estate agents, along with cafes and restaurants, should be among the first to reopen – with business leaders adding that property is a key economic ‘multiplier’.
The report was released just before the government extended lockdown for another three weeks until May 7. Within that time the U.K. has slowly managed to suppress its curve, as the government reported on May 4 the lowest daily rise in deaths since March 30, raising hope that we’ve ‘passed the peak’.
Since then the government has been consulting on draft return-to-work guidance which has been shared with businesses and unions with the intended aim to restart the economy whilst maintaining health and safety. And this week, speculation on whether the property industry would be among the first to benefit from a relaxation of the lockdown increased with the reveal that Housing Minister Christopher Pincher had been speaking with the sales industry about property viewings.
Whilst we have no official confirmation at this time, the reveal includes possible provisions to viewings such as that they could take place for no longer than 15 minutes, and that adequate PPE equipment must be worn by all parties. Viewings will be limited to two adults only and must be staggered to maintain social distancing – so no more open houses. For agency branches the rules maintain the necessity for safe distancing, such as screen protection between workstations and a ban on hot desking.
The veracity of this information will likely come to light on Sunday when it’s anticipated that we’ll discover the next steps as to whether we are in for another extended period of lockdown or if the restrictions on our livelihoods and businesses might be relaxed. Nevertheless, in support of the reveal NAEA Propertymark Chief Executive Mark Hayward commented on a recent Rightmove Hub webinar that he expects the housing market to re-open for business in three weeks’ time.
This would align with an anticipated three-week extension of the lockdown, giving preliminary businesses time to prepare to restore some functions as restrictions on certain industries are lifted. A recent survey from the British Chambers of Commerce found that most firms would be able to resume business within three weeks with sufficient notice; and two-thirds were confident that they could restart with just one week’s notice, or at no notice at all, if the possibility presented itself.
Given that the property industry is vital for the health of the wider economy, and because the act of buying and selling property is one of the biggest contributors of economic growth and sustainability, I am optimistic that the housing market will be first in line to resume business in the first wave of restrictions being lifted. The infrastructure is in place for many agencies to quickly restart viable operations if given enough notice.
But we should also remain wary that a quick economic return is not gambled against the risk of a second wave later in the year. Any lifting of the lockdown should be carefully considered with proper precautions in place to protect the health and wellbeing of buyers, sellers and property agents. Because the economic cost of a second lockdown could be far more severe than the first.
As countries around the world start to look towards the lifting of their own restrictions, the impacts of such decisions on domestic property markets will be warily observed here in the U.K.
The announcement on Sunday from the Australian government that they would be soon relaxing some of the coronavirus lockdown restrictions, including real estate, is one such example. From next weekend in New South Wales, Australia, property agents and home sellers will be able to hold traditional property inspections and on-site inspections, with restrictions similar to those included in the draft plans in the U.K.
It should be noted however that Australia has done a very good job at flattening its curve while keeping infections below 7,000 and fatalities at less than 100. Contrast this scenario with Italy, which has over 200,000 confirmed cases and almost 30,000 deaths, and the outlook for relaxing lockdown restrictions takes a somewhat different perspective.
As of May 4, Italy launched into Phase 2 of its coronavirus lockdown: relaxing restrictions on small social gatherings and allowing key industries such as manufacturing, professional services and real estate to resume activity. There is some anger however at what is perceived as a ‘false reopening’ of the country as other businesses and facilities such as schools and facilities will remain closed during this phase. The danger considered is that the new rules on industry and social distancing do not go far enough to protect the economy, as well as the finances and health of the people.
The lifting of restrictions is a sign that social distancing and lockdown conditions are working. But as each country looks to relax the rules the headline issues will remain how to ensure health and safety of those involved, and to minimalize the risk of a second wave of infections hammering economies further if COVID-19 cannot be eradicated entirely from local populations.
Naturally, the situation of each country is unique. While Britain’s coronavirus trend may be more in line with Italy’s, the fundamentals and scale of our economy are much more comparable to Australia’s. With that in mind our conditions for relaxing the lockdown must also be unique.