City’s residential market ‘back from the brink’
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Liverpool’s residential market has drawn ‘back from the brink’ according to property specialist Alan Bevan.
The boss of City Residential said in his latest quarterly review of Liverpool’s property sector that there are signs of recovery, compared with “Armageddon for the housing market as the Government locked down the country, closing shops, pubs and offices whilst effectively ‘killing’ the residential marke by banning viewings, progression and movement of sales/lettings transactions.”
He said this is due to assistance from Chancellor Rishi Sunak through a Stamp Duty holiday until March 2021, and the prospect of extremely low interest rates for the foreseeable future.
Mr Bevan said: “It would not surprise us to see more support for the housing market at some point in the future, although the Government does not have an endless pot of cash despite appearing like they do so given the scale of their support for the economy.”
He added: “In addition to the support of the Chancellor/Government, interest rates are unlikely to go higher for many years and may even turn negative if the outlook for COVID-19 worsens.
“Whilst many commentators focus on average earnings/average house prices as the ideal indicator of the likely future direction of the market, continually low interest rates are probably more important/relevant.
“The current level of base rates and mortgage rates makes property in the city extremely affordable, especially for those with a decent deposit and good earnings.”
He said the sudden shock of lockdown had a profound effect on the industry: “Whilst we did not see a collapse in our existing sales and lettings pipelines, we obviously agreed very few new lettings and sales during this period.
“Thankfully, as we approached late May and were back fully operational, the market sprung back to life.
“There are still huge challenges ahead, not least the effect any future lockdowns/COVID-19 issues will have on the market and people’s ability/willingness to move/pay their mortgage/rents.
“There is also the ongoing and previously mentioned issue as to how the city will emerge from these tough times and whether it will still look and feel like the sort of city that people want to live, work and socialise in.
“We are confident it will, however, there are some serious challenges ahead, especially for those smaller independent businesses who are struggling to survive.”
He said, among some positives that can be drawn from the current situation, potential buyers are being attracted to the city in the hope of buying at reduced prices.
Some landlords are keen to sell, given the challenges of the rental market, thereby offering some good quality, well established stock for sale.
Conversely, Mr Bevan warned that the challenges in the rental market are resulting in an increase in supply of property for sale which, if not matched by an increase in buyers, may cause prices to fall.
And he added: “The effects of COVID-19 on the fabric of the city could be devastating, especially if further lockdowns are required.
“The city has prospered on its reputation as a vibrant, exciting and friendly place to live, something which could be under threat should the effects of COVID-19 be more severe than we currently believe.”