Should the property sector be preparing for a coronavirus-led downturn?

The property sector has been told to prepare for a downturn in the market whilst keeping everybody safe during the coronavirus outbreak.

That’s according to property management company Apropos by DJ Alexander, which believes that there will be an inevitable downturn in property sales and also in lettings as the market prepares to cope with an unprecedented situation.

The company believes sales may be hit more as there will be a shortage of people deciding to sell now unless they absolutely have to. In addition, with movement limited thanks to government measures or people self-isolating, lettings are set to remain flat with people more likely ‘to batten down the hatches’ rather than contemplate a move.

With this in mind, Apropos believes the sector must prepare for the coming weeks and months ahead in order to make sure that everyone remains safe. This, the firm says, will involve significant organisation and rearrangement of the way in which the sector operates.

“It is clear that we are in uncharted waters with coronavirus and everyone must be guided by the government’s advice,” David Alexander, joint managing director of Apropos by DJ Alexander, said.

“The priority must be the safety of our staff and our tenants. There will, undoubtedly, be a slowing down in activity, particularly in sales but also letting. Not many people will sell their house at the moment if they don’t have to and fewer people will be moving to a new area or property therefore lettings will also be slower.”

In the private rented sector, he believes most tenants will want to remain in their properties. “With self-isolation becoming more likely for a large percentage of the population, it is more likely people will want to stay in their existing home. This means that we must ensure we have effective communication with tenants throughout this period whilst keeping our staff safe.”

He said sending tenants links to NHS guidance on what to do during the coronavirus is essential. “It would also be prudent to ensure that any older tenants or those with underlying health issues remain in communication which can be conducted by phone or email if they have it,” Alexander added.

“I believe there will be less new activity during this period, but we still need to provide a full service for our landlords and tenants. Maintaining as much of a sense of normality is essential at this time.”

Equally, though, he argued that ensuring staff are safe is crucial. As such, if people are to meet new tenants in properties then ensuring everyone is aware of and implementing the correct health and safety measures to protect themselves from infection is vitally important.

“It remains to be resolved what happens if essential maintenance is required in a property where someone has coronavirus,” Alexander continued. “A broken boiler, water leakage, or electrical issues all require immediate action, but it would be wrong to send someone to repair in a property where someone has the coronavirus. Greater guidance from the Scottish and UK governments on these issues is essential and a delay in implementing the new electrical safety regulations would seem sensible.”

Alexander said many tenants are likely to face financial issues as a result of Covid-19, so arrears may become an issue. A holiday on rent payments may be something the government considers introducing if the crisis worsens.

“Agents must respond sympathetically to this as we are clearly living through uncertain times,” Alexander said. “Landlords with mortgages should be encouraged to contact their lenders as soon as possible to negotiate payment holidays which many of the banks have already agreed for individual borrowers so this may be available for landlords.”

He pointed out that many agencies may face financial difficulties, too, if there is a prolonged slowdown in the property market and the wider economy. “This outbreak will undoubtedly cause financial strains in the property market and for those businesses already struggling, it could be the last straw. But, equally, there is now in place a strong financial support network announced in last week’s Budget, so hopefully this will ensure coronavirus does not result in business closures.”

Alexander concluded: “These are very difficult and uncertain times so all agents must be flexible, responsive to changing circumstances, and fully informed of government advice. With no clear indication of how long the coronavirus will last, how many people will be affected, and the impact on the wider economy, it remains an unprecedented and testing time for everyone but one that we must get through. Landlords, tenants and agents need to work together through these uncertain times.”

Our sister sites (Estate Agent Today and Letting Agent Today) are currently running a daily coronavirus series – Conquering Corona – where official guidance is combined with agent tips and advice to outline how the impact of the disease on the industry can be minimised.