What buyers can expect from Merseyside’s property market

Merseyside's property market has been turned on its head by the coronavirus crisis, with the easing of lockdown bringing a sudden surge in demand.

The housing market in England reopened on May 13 – and there was uncertainty among estate agents and buyers alike as to how the industry would truly be affected by the continued pandemic.

While some anticipated the ongoing crisis would dampen the mood for moving, the opposite actually turned out to be true, with a huge surge in demand across the board.

Everyone from first time buyers spurred on to save during lockdown right up to house hunters looking for properties in the £1 million bracket all seem keen to move.

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According to property website Zoopla, the asking price of houses sold in June across the country went up by 7 per cent compared to last year.

They attributed the increase to less supply and elevated demand as the market returned.

But two months since the market returned, what do estate agents say about the post-lockdown landscape – and what the future holds for house hunters on Merseyside?

We spoke to Rob Farnham, Director of Venmores, about how the market in Merseyside has changed since it opened back up for business.

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Mr Farnham's company is responsible for three of the biggest estate agencies in the region – Venmores, Ball & Percival and Bradshaw, Farnham & Lea.

They also run Right Click Finance, which is the region’s largest mortgage broker, and has seen major changes in how buyers are able to borrow since lockdown.

You can view properties on the market in your area and compare house prices using our dedicated property tool:

'We sold four properties in the last month in £1 million plus bracket, which is kind of unheard of'

The property market in Merseyside is experiencing something of a bubble, with everyone from first time buyers to families emerging from lockdown with a new set of priorities.

Buyers who may have been living at home with their parents have had a huge incentive to save during lockdown, with the absence of the usual distractions to spend money on like holidays or nights out.

Families have also reassessed what they want from a home, after a lockdown spent wishing for more space, a garden or a move to a different area.

Coupled with the number of households busying themselves with DIY and doing up their homes, the re-opening of the housing market saw a sudden surge in demand for estate agents in the region.

Mr Farnham said: "From the estate agency side, since emerging from lockdown, we have seen an increase in demand. Viewings and application numbers are almost like for like with June 2019, so the market has certainly come back full steam.

"One significant difference is the amount of properties sold in June 2020 is far more than June 2019. People looking [at houses] are more genuine than they were in 2019 or more keen to get houses.

"In Southport, the amount of properties we've sold in 2020 is 50 per cent higher than in 2019 – and yet the number of people registered to buy and going out to look at houses have remained exactly the same."

He added: "It has been similar across each of the different areas – Liverpool, Southport, the city centre. Lockdown has created an absolute increase in demand."

Mr Farnham said lockdown has caused people to ask questions about their lives and what they want from their homes, and encouraged people to 'get on and get moving'.

He said: "That's across the different areas of the market from two bedroom terraces in Kensington to £1.5 million homes in Caldy. We sold four properties in the last month in the million pound plus bracket, which is kind of unheard of."

But this sudden influx of eager house hunters looking to buy has led to demand massively outstripping demand.

Mr Farnham said: "The challenge is that initially there was a lot of property available out there because no one had their house valued for months but now the number of properties coming to the market is slowing."

'People are making offers that are far above the asking price'

This sudden demand for everything from starter homes to larger family homes has meant certain areas of Liverpool have seen prospective buyers entering bidding wars for their ideal home.

Properties in some of the city's most sought after areas, such as parts of South Liverpool, are selling for well above their asking price as buyers compete for the housing stock that is available.

Mr Farnham said: "People are making offers on houses in South Liverpool that are going far above the average asking price. There was a case yesterday [Wednesday, July 15], we have an auction business as well, and we had a property for sale in our estate agency in Newling Street in Birkenhead.

"We'd struggled to sell it at £40,000 but at auction it achieved £55,000 which is crackers."

Buyers offering well above the asking price for the limited houses that are available may be a product of people being holed up for months, dreaming of a big move.

Mr Farnham said: "People feel like they've been held up for months and frustrated so that has manifested."

He added: "People are emerging from lockdown and getting on with their lives, cracking on and they aren't thinking of holidays and putting it towards the house.

"There are a lot of factors making people want to move. The property market in South Liverpool is seeing high demand and so property prices are increasing."

An escape to the country?

Elsewhere in the UK, local media outlets have reported a flight out of city centres towards rural areas.

The Manchester Evening News reported a 'summer flight to the suburbs', with estate agents noting ‘absolutely incredible’ sales in areas like Bury and Prestwich.

But in Merseyside the picture is different, due to the more condensed nature of our city which has less semi-rural commuter locations than Greater Manchester.

Mr Farnham said: "Merseyside is totally different because we have a lot of suburbia with great houses and gardens and they are very distinct from Liverpool city centre, where the market is still strong.

"I wouldn't say there has been that [move to the rural areas]. I've read that in the press too but we haven't seen it here.

"Merseyside is quite condensed and there aren't as many rural properties so we don't have the same commuter areas as Manchester does in North Chester and Rochdale, where you can commute and live a rural life still."

So while other parts of the country have seen buyers leaving the city in search of a more rural location, Merseyside's property market has proven just as strong in busy, urban areas as in the suburbs.

'It's like trying to get a Glastonbury ticket'

While demand outstrips supply in Merseyside's property market, those who are able to find their dream home have also noticed changes in how borrowing works since lockdown.

With so many first time buyers looking to get their foot on the property ladder, 90% mortgages have become harder and harder to secure.

With banks 'take a breather' during unprecedented economic times for the country, mortgage brokers have reported less 90% mortgages being available.

Mr Farnham said: "The biggest challenge we've has is in 90% mortgages being very hard to find. The brokers will go on and meet the buyer and get them an application in principle at 90% but when it comes time to place the product banks are releasing very few actual mortgages each day.

"It's like getting a Glastonbury ticket, getting a 90% mortgage."

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He added: "It's just while banks take a breather and the amount of 90% mortgages people have applied for is an imbalance."

But for buyers on Merseyside who are looking to sell their property and move to a new home, it's a brighter picture.

Mr Farnham said: "For people who are not first time buyers, there are plenty of mortgages out there with amazing rates of less than 2%.

"It's so cheap it makes it cheaper to get a mortgage on a house than it is to pay rent."

The coronavirus crisis has changed so much of how we live, from the way we shop to the way we socialise and see our families and friends.

And it seems Merseyside's property market has also seen the impact of lockdown, with buyers desperate to move after months spent sat at home frustrated, or motivated to save with little else to spend on.

With demand currently outstripping supply, estate agents will wait to see what this means for long term house prices in the city's most sought after areas.