With only around 1 in 5 Luton house sellers actually selling their home in the last month, Luton sellers and buyers will need to continue to be pragmatic if the surprisingly strong current levels of activity in the Luton property market are to be sustained.
To start, we had the once in a lifetime event of the credit crunch in 2008, we then had another once in a lifetime event with the Brexit vote in 2016 and now the mother of all ‘once in a lifetime’ events, Coronavirus in 2020 – three once in a lifetime events in the space of 3 Olympic Games!
The doom-mongers forecast that the British property market would drop like a lead balloon on the scale of the 1989 housing crash (where property values dropped by 30.87% in a couple of years) but would be nothing compared to the tsunami that was Covid. Yet in the first 100 days of the property market coming out of lockdown, behavioural and economic changes mean that many Luton homebuyers are now even more dedicated to moving home and the Luton property market is doing quite well.
Going into lockdown, the effect on activity in the Luton property market during those two months was expectable and predictable as it was placed in suspended animation during April and May. When the Luton property market re-opened in mid-May, nobody predicted what happened next. Of course, many of us in the property industry estimated some release of pent-up demand from the Boris Bounce, yet nobody anticipated such a ricochet in activity in the Luton property market.
This is particularly interesting when one considers GDP dropped by 20.4% in Q2 2020 (fascinating when compared to notable historic times when it dropped by 13.8% in WW2 and 16.7% in WW1), yet amidst the largest contraction in the UK economy ever in a single quarter, what wasn’t expected was an increase of potential property buyers and property sellers wanting to move post lockdown.
Some have cited this boost to the property market on a number of factors. Firstly, we have had the Stamp Duty Holiday, others have pointed at the never seen before 0.1% Bank of England base rates making mortgages cheap, then we had the furlough scheme which protected so many jobs and finally, the pent-up demand from the Boris Bounce.
Yet, when one actually talks with Luton buyers and sellers, whilst all of them cite one or two of the above reasons, all of them mention and talk about how the lockdown has made them re-evaluate and reconsider how they want to live, their work-life balance and where they want to live. This is also reflected with tenants changing their requirements when looking for a property to rent (so Luton landlords - be aware of this).
Demand for apartments in the centre of Luton has eased off, whilst demand for property with a good-sized garden or other outside space has increased. One question we get asked all the time is also the broadband speeds, although they are quite decent in Luton (the average broadband in our local Council area being 67.3 Mbps download and 12.2 Mbps upload).
So, with record numbers of Luton properties coming on to the market - is it boom time for Luton homeowners?
Of the 766 properties that have come onto the market in Luton over the last month, only 144 of them have agreed a sale
(a percentage of 18.7%)
That means around 4 in 5 Luton people that have placed their property onto the market have not found a buyer yet.
Yes, the Luton property market is good, yet the number of people who have placed their property on the market has also gone up. Luton estate agents have never been so busy putting property on the market and I feel sorry for the chap who is putting up all the for-sale boards – his wife hasn’t seen him in daylight for weeks!
But that does mean you are in competition with so many other properties on the market (the number of properties coming on to the market typically at this time of the year is about a third to half less). The Stamp Duty boost ends in March 2021, so that means you need to have found a buyer by November at the very latest. By overegging your asking price, to test the market, might mean you will lose out on this hiatus and could end up missing the boat!
The prices being achieved for the Luton properties that have been selling have been fair and realistic and have stood up much better than many were originally predicting.
Yet as the country looks forward, given the ambiguous nature of the outlook for the British economy and the possibility that Covid-19 may be with us for a little while yet, I must implore Luton property sellers to be realistic with their asking price so a greater number of you who want to make the move, are able to do so.