Vaccine and easing of restrictions will help restore stability
THE property market is expected to pick up pace this year after a tumultuous 2020 which saw it battered by the impact of the coronavirus pandemic.
Property agents said COVID-19 hit the property market hard, as it did the entire hospitality industry, as pubs, restaurants and hotels were subject to months of closure followed by tough trading restrictions when they were allowed to reopen.
Acknowledging that the coming weeks are likely to remain tough for hospitality businesses, property firms are hopeful that a sense of normality is on the horizon as the vaccine roll-out continues and restrictions are eased. And they are confident the market will pick up pace again as a result.
Barry McNeil, director of Cornerstone Business Agents, said the pandemic has had a “wholly disastrous” impact on the sector, but he is hopeful some stability will be restored.
“From Cornerstone’s point of view, we did not see an immediate fall off in sales and interest – however four weeks into the [March] lockdown and the significance and seriousness of the pandemic started to take hold and we saw full-scale reversal on any planned deals with a majority of buyers choosing to pull out of deals and a brave few postponing or continuing,” he said. “There was a discernible pick-up in activity in August and early September, only for this to be stymied by the licensed trade lockdown and tier system which followed.
“As an agent I am a natural optimist. I do predict that by summer 2021 we would hope to see a return to some part of normalcy but we should add a note of caution in terms of the economic situation the UK will be in as the monies paid out by central government will need to be paid back.
“In short, from spring onwards I do hope we will have a better buying and selling environment.”
That was echoed by Bruce & Co.
“Over the last few months, the levels of interest have been strong and we forecast this to continue into 2021,” said a spokesman for the agent.
“As the vaccination programmes begin to roll out across the UK and immunity is achieved, then restrictions will ease and we will see a significant increase in market activity. As 2021 goes on I expect a pent-up demand to result in higher than average completion levels from April onwards.”
Alan Goldie, director at The Restaurant Agency, agreed, saying there is a “positive vein running through the sector” in the wake of the vaccine news. “Whilst the remaining winter months will still be a challenge with lockdowns to a greater or lesser degree, entering spring it is hoped a sense of normality will return and pubs, restaurants and cafes can all reopen fully and the market will re-emerge gradually but strongly as consumers venture out again,” he said.
And there are expected to be some notable trends.
Smith & Clough director Graeme Smith said demand for rural businesses is likely to remain high.
“I think that the more rural businesses are going to be of interest to buyers as many have done well when they were allowed to open, and this pent-up want to get away for the weekend will take people from the more densely populated areas to the rural settings, country house hotels, village inns, etc.” he said.
“These trading levels have proved that when they are able to open back up, there is no reason to think that these trading levels cannot be reached again. However this will all be dependent on the travel restrictions being eased.”
High demand for rural businesses is also anticipated by Bruce & Co.
“Staycation holidays are predicted to boom with many owners already reporting strong levels of 2021 bookings; this is very encouraging news for new buyers looking for hotel and guest house businesses as they seek to move to less densely populated areas,” said a spokesman for the property agent.
“With the cost of borrowing cheaper than ever, it provides an attractive economic climate to support new entrants with cost-effective funding.”
McNeil at Cornerstone agreed that interest in rural business is likely to stay strong. “At Cornerstone, we are seeing a rise and flight in interest to rural property with guest house and B&Bs in particular,” he said.
“Lenders seem comfortable with them as the bricks and mortar value nearly reflect the full price of the business – the lenders then have minimised their risk and exposure.”
Graeme Smith of Smith & Clough said: “A couple of the deals that we are currently working on in the more rural areas have had bank funding approved as the buyers come with a wealth of experience and are able to show an acceptable business plan and COVID strategy going forward once they take over and it helps with the lenders that these rural businesses have traded exceptionally well from July through to October, as many people were heading for the countryside to enjoy a staycation.”
Goldie at The Restaurant Agency said it is an “opportunistic time for prospective buyers”.
“Prices remain soft for now so if you have funds to access then it’s a good time to buy,” he said.