Rebecca Stott of FoundIt London, which helps first-time buyers find homes, said: “First-time buyers aren’t ready to leave London, they are craving to get back into the office and have that human interaction.” But when it comes to purchasing, coronavirus means that they are now “very cautious”.
“Their confidence is low for where the market is going to go when the furlough scheme and the stamp duty holiday ends. Then there is the affordability side, they are concerned about their job security,” said Ms Stott.
Many are also struggling to get funding after lenders have withdrawn low deposit mortgages from the market.
“We’re advising our clients 5 to 10pc less than the market value for properties, to give them the confidence to buy,” said Ms Stott. The result is a “stand-off” between buyers and sellers.
Meanwhile, Saul Empson, of Haringtons, a buying agency, said a drop off in international buyers has wiped out much of the interest in the capital’s expensive markets.
Sales to domestic buyers who are purchasing homes for themselves to live in are “pretty robust”, said Mr Empson.
He cites the example of a buyer who had agreed to purchase a house in Twickenham before lockdown for £2.9m. When the housing market reopened, they tried to renegotiate the price to £2.6m, but the vendor put the house back on the market. “It ended up going to a bidding war ending with the original buyer paying £3.1m,” said Mr Empson.
“But the moment you get into the discretionary market – the chic sheikhs or international buyers looking for property investments – that market is gone.”
In the last six months of 2019, those buyers accounted for 55pc of sales in prime central London, according to Hamptons International. Now, “they are not travelling,” said Mr Empson.
After W1, the next worst-performing postcodes in the country are Covent Garden’s WC2, where 8pc of listings are under offer, followed by Shoreditch’s EC2, with 9pc.