The “Butterfly Effect”14th May 2020
Since the coronavirus lockdown came into force seven weeks ago, questions have continued to mount over its damaging effects to the property market. Martin Pratley, Head of our Conveyancing Department, shares his predictions for the uncertain months ahead.
The question which most people are asking right now is “what is going to happen to the property market?”
My answer to this is below but, firstly, let me explain how I arrived at it.
The 30 plus years that I have been working as a property lawyer have taught me one thing; this being that you second guess the property market at your peril. It is not predictable with any degree of certainty and is extremely sensitive to changes in our internal economy which itself is subject to a myriad of ever-changing global conditions and influences.
A stable property market relies on certainty and confidence. Brexit and never-ending elections were the cause of uncertainty which laid the property market low for some time. Recovery was well under way in the early part of this year as we could see an end to the Brexit fiasco. We finally had a Prime Minster (love him or hate him) who was going to have a longer shelf life than a pot of yoghurt.
As with the flapping wings of the “Chaos Theory” butterfly, an event in, say, north eastern China, may have totally unforeseen consequences for our economy. Add in a soupcon of the “Law of Unintended Consequences” as nation states try to deal with the consequences of it all and the result is uncertainty on many levels. The same uncertainty that has haunted us for the past 3 or so years. The brakes were starting to go on again.
Add to this the lockdown restrictions which stalled the logistical side of house moving together with job losses and future employment prospects and the result was that the market froze (please note I have not said “crashed”).
This appears to all intents and purposes a true “Doomsday Scenario” and if the story ended there, it probably would be. However, there is hope. Many people are still intent on moving having waited too long already for an opportunity to do so. They accept that things will improve and wish to get on with their lives.
Lenders are being more understanding and interest rates are at a low which will assist purchasers. Whilst sellers may wish to hang fire fearing a slump in prices, the demand that has built up over the past years may be sufficient to ensure that prices, on average, remain stable or, at least, do not plummet as catastrophically as some pundits are predicting.
Mix in a raft of other measures that exist and which may come to fruition (I am not convinced that the calls for a Stamp Duty holiday will bear fruit but would be delighted to be proved wrong!) and the market may be revitalised. It will start to move again and in respect of many transactions, it should pick up where it left off.
So, in response to the question “what is going to happen to the property market?” (and bearing in mind my lesson in not second guessing the market) my answer is simple, “go ask the butterfly.”
For further information and advice on the property market during this time, get in touch with Martin at or call 01392 424242.