Diary of an agent: Priya Black
Priya Black is a partner in Knight Frank‘s London New Homes team. She heads up the Baker Street New Homes department.
4 minutes to read
Priya joined Knight Frank in 2007 in Leeds before moving to London in 2010 to join the team based at Baker Street. She manages a team that provides consultancy advice to developers across central London.
Here, Priya discusses how buyers are responding to the pandemic compared to the 2008 financial crisis. While coronavirus has hit London new homes sales, new enquiries and virtual viewings are on the rise. But given the predicted economic contraction, Knight Franks forecasts that the number of home sales in 2020 will decline by 526,000, a fall of 38% on 2019 transaction levels.
How is the lockdown impacting your working life?
I typically meet with developer clients on a daily basis, so the face-to-face communication is now replaced with video meetings that have fast become part of our everyday life. More than ever, our clients require regular updates to monitor what is happening elsewhere in the market.
As sales operations have shut down at developments and construction is halted on some sites where necessary, it has obviously affected the volume of transactions. However, we have experienced some healthy activity over the past week, which presents a positive outlook.
Which areas of the market are most active?
We are seeing a lot of interest from international buyers (mainly based in Hong Kong and China) and there has been an increase in transactional volume over the last week. As we market predominantly off-plan developments, most prospective purchasers are aware the market is likely to bounce back before some of our sites complete, especially if the build programme is two to three years away. International buyers are already familiar with viewing marketing collateral remotely, so virtual viewings are widely accepted. I do think virtual viewings and videos will be used more frequently going forward, especially as the quality of collateral is constantly improving.
What has surprised you?
When we’ve experienced other significant changes in the market, such as the credit crunch and the 2016 stamp duty measures, demand for residential property was reduced and transactional levels were significantly impacted. However, this time, the reaction from potential buyers has been very different; they appear to be more understanding and the general opinion is that there is a light at the end of the tunnel. Rather than withdrawing their interest, some applicants are simply putting their plans on hold and are willing to engage in a general conversation about the market. As we are forecasting growth across London from 2021, this has proven to be useful information to relay to prospective purchasers considering an off-plan purchase.
On another level, what has surprised me is how well we have all adapted to working from home. The collaboration between teams and increased communication across the wider business has been impressive and will no doubt continue.
What is happening with existing deals?
Buyers are still committing, albeit there is some flexibility required in terms of exchange and completion deadlines, due to funding restrictions and personal circumstances. We are still progressing exchanges and completion where possible and most developers have adapted their handover process to allow buyers to complete on properties.
Since lockdown, the majority of our new reservations have been agreed at sub £1 million, however a few sales have also been agreed between £2 million and £6 million which demonstrates that there is still confidence in the market.
Who is buying and what kind of opportunistic investing are you seeing?
As well as the demand from international purchasers, we have also received more enquiries from buyers looking to buy six or more properties, in order to benefit from reduced SDLT.
Most of our investor purchasers are typically yield driven, so they are open to considering opportunities across London, in both prime central neighbourhoods and outer areas, such as Brentford and Royal Docks.
How do you think the pandemic will influence the property industry longer term?
Most people will be reflecting not only on the way we live our lives, but how and where we do it in the future, which should hopefully trigger demand as property moves are considered.
Obviously transaction levels will continue to be impacted, especially as it is not clear when recovery will commence. However hopefully pent-up demand will help to strengthen the market, especially if we look at how some of the global markets are improving. Increased incentives may also be required in order to get things started.
Regular updates with our competitors to discuss how we are finding the market has been essential. At the moment, there is less competition and more cooperation between agents. How we communicate with our colleagues, competitors and clients during lockdown is crucial, as future success in the industry is dependent on the strength of relationships.