Nationwide has recently reported that UK house prices are 6.5% higher than a year ago and that the housing market remains “robust” despite the economic effects of the coronavirus pandemic.
We have just exited a second national lockdown and yet, according to HMRC’s UK monthly property transactions commentary, residential sales in October 2020 were somewhere between 8.1% and 13.7% higher than in the same month last year.
All of this is testament to the adaptability of house buyers and sellers, particularly bearing in mind the varied practical challenges that this difficult year has presented for all concerned.
One interesting development has been the emergence of virtual house viewings, given by either the seller or their agent. It is not yet known how many transactions have completed without the buyer ever physically attending the property but, anecdotally, this is happening. A recent American study (by the National Association of Realtors) found that one in every 20 homebuyers in the USA has been purchasing “sight-unseen” during the pandemic.
All of our lives have, to some extent, “gone virtual” in the past year and many predict that some of these changes will be long lasting. With that in mind, and in anticipation of a further flurry of house buying activity before the stamp duty holiday is due to end (March 2021), we offer some practical tips in relation to virtual house viewings:
- Remember the principle of caveat emptor or “let the buyer beware”;
- This principle means that the onus is on the buyer to find out everything they want or need to know before contracting to purchase a property;
- In the context of virtual viewings, it may be difficult to see the small details that would be noticeable in person. Buyers should not be afraid of asking to revisit or examine particular areas in more detail;
- Remember the importance of surveys, which should pick up any issues not seen on a virtual viewing;
- In addition, buyers should (with assistance from their solicitors) take advantage of the pre-contract enquiries process, to satisfy themselves on any unresolved matters.
- Caveat emptor is designed to protect sellers and means they do not have an unlimited disclosure obligation to their buyers – sellers should not be put off from selling;
- That said, it is important for sellers to be open and transparent, to avoid any risk of a misrepresentation claim arising;
- One of the remedies for misrepresentation is rescission / cancellation of the sale contract. Damages may also be claimed by the buyer;
- In the context of virtual house viewings, the key for sellers (especially those conducting viewings themselves) is to provide a comprehensive tour and not to avoid any problem areas;
- Transparency, combined with the use of a good estate agent and solicitor, should ensure there are no issues.
Approached in the right way, we see no reason why virtual house viewings cannot be a positive tool for the post-pandemic future. We also suspect that, for a lot of buyers, there will never truly be a substitute for seeing – and feeling – their new house in person before committing to it.
UK house prices are 6.5% higher than a year ago - the sharpest rise for nearly six years, the Nationwide has said. The acceleration came as the housing market remained "robust" despite the economic effects of the coronavirus pandemic, the lender said.