Coronavirus – also known as Covid-19 – has had a dramatic impact on the world since the first reported cases in China at the backend of last year.
Since then, it has spread to almost every part of the world, with the lockdown of major cities, cancellation of sporting events and self-quarantining of people showcasing symptoms or returning from the worst-affected areas.
China has had by far the most cases, but Italy, South Korea and Iran have all struggled badly to contain the virus in recent weeks. In Britain, where 115 cases have so far been confirmed, the government recently released a six-point action plan to combat the spread of coronavirus, including calling the army in to help if civilian authorities are struggling to cope, closing schools and advising elderly people – who are most at risk of the virus – to stay away from large social gatherings.
Across the world, from hotels in Tenerife to cruise ships in Japan, the coronavirus has caused panic and consternation.
While the mortality rate is reassuringly low (around 1%), four in five people with the virus only show mild symptoms and those most at risk are the elderly and those with pre-existing health conditions, fears have been sparked about the possibility of a global pandemic as the number of cases has soared.
Stock markets have been swinging wildly, regional airline Flybe has collapsed, health bosses have raised concerns about the capacity of health systems to cope with a sudden spike in cases, and there has been talk of major global events such as the Olympics and Euro 2020 being postponed or cancelled to stem the virus.
At the same time, there has been an ongoing battle against disinformation – with myths and falsehoods spreading via social media quicker than public updates can be provided – as world leaders try and disseminate accurate information to their citizens ahead of the half-truths and fake news.
The health crisis has had a noticeable impact on all parts of life, with airlines grounding flights, Airbnb’s profits taking a hit, popular tourist attractions virtually empty and people cancelling holidays and business trips.
It’s affected the property world, too, with March’s flagship MIPIM conference being pushed back to June after a number of high-profile attendees pulled out.
But what impact is it having on tenant demand in the UK from China, the country worst affected by the virus with the bulk of cases and deaths found there?
Megan Wang, Asia Desk Lead at Build to Rent referrals platform Houzen, said: “I deal mostly with Chinese student tenants and applicants, as well as Chinese investors in UK properties, on a daily basis. In the last 2-3 weeks, any kind of processes related to bringing new tenants to the UK are being severely delayed.”
She said people in China are not willing to travel internationally, and many of them have delayed their arrival to the UK to September/October-time, instead of the common summer season.
“There’s still a high demand for property viewings, however we switched in 70% of cases to virtual viewings, by video call and WeChat. Most of the applicants don't have a problem viewing a property this way and are comfortable making their decision just based on that. In terms of how many people might actually arrive in the UK later in the year, I see a potential for a spike in the number of international students moving to the UK.”
She added: “Some universities lowered their required grades for Chinese applicants, so if the situation with coronavirus gets better soon, we might see an even higher number of incoming students later on. In terms of property sales - it doesn't look like the usual market is affected yet. However, I did hear about some buyers looking for properties to buy outside of mainland China as a ‘safety home’ in case the situation gets more serious. This is just a very rare comment for now, though.”
Terry Mason, group operations director at rent guarantor service Housing Hand, said the coronavirus remains a worry to all in the lettings market. “At present we have seen very little effect - however, it has the potential to be devastating,” he explained.
“If the virus spreads and becomes a pandemic around the world, then people coming to the UK needing to rent property will drop dramatically. On the other hand, those from abroad who are already here may not be able to (or wish to) return home - but will they have the means to pay their rent?”
He added: “In the short-term, I think it's business as usual, with everyone watching the economy for any change in their business income, essential for paying wages. If the virus spreads, we could see businesses unable to pay staff and redundancies leading to many tenants being unable to pay their rent.”
Mason said that, if companies are not hiring or students decide not to travel to the UK for university courses, ‘we would have a huge oversupply of available lets and a whole year of letting upset’.
“I think we are in the balance now; the outcome depends on containment,” Mason concluded. “Currently, the numbers here are extremely low, as is the risk of catching the virus, let alone dying from it, but looking at the worst-case scenario should help people take the necessary steps to help containment.”
What about overseas investment?
Camilla Dell, managing partner at buying agents Black Brick, said the impact on Prime Central London – where many overseas investors, especially from South East Asia, purchase property – had so far been minimal.
“Although a fair proportion of PCL homes are bought by HNW international buyers, we haven’t yet had many clients talking to us about the coronavirus,” she said.
“However, with some employers asking staff to self-isolate and work from home, we can predict that home offices will become more popular.”
She added: “We’ve seen a variety of buyers interested in properties with large studies, or serviced executive suites within luxury developments; and this is part of an ongoing trend for people to work more flexibly, aided by increasingly agile technology within the home.”
Hannah Aykroyd, managing director of boutique property advisory firm Aykroyd & Co, said stock markets have dropped (and since slightly recovered) in response to news about the coronavirus, and ‘in general, investors around the world are slightly holding their breath to see how things unfold’.
“At Aykroyd & Co, we have had two foreign buyers ask us to put their searches on hold temporarily due to travel restrictions or concerns about travel restrictions,” she continued. “However, in one case, we solved the problem with a creative approach and carried out a remote purchase.”
“Equally, we have two separate clients in town from Hong Kong who have been here since the news first broke and are using the time to focus on property investment in London. As a result, we are advising on building out a property investment portfolio which we would both acquire and manage for the long-term.”
Aykroyd said it was important to note that ‘neither we nor our clients are worried about the long-term resilience of the London property market, particularly at the top end’.
She claimed PCL residential property has been the best-performing asset class in the world over the past 25 years - through all kinds of crises.
“We are currently in a buying opportunity and this will not change with the outbreak of coronavirus. Savvy investors are well-aware of this.”