Update: Housing market unlocked as buying, selling and renting resumes
The government has confirmed that the housing market can restart once again. Experts expect to see a surge in activity thanks to the pent-up demand in the sector. Some would argue that the housing market had never actually "stopped" in many areas. Housebuilding in most cases has continued through the crisis, perhaps with a pause in activity to assess new practices. Meanwhile, many others had continued to do what they could towards their buying and selling plans, embracing technology more than ever before.
However, yesterday's green light from the government will spark a more public revival. Estate agents and letting agents can reopen and people can physically view homes where it is safe to do so. Removal firms and conveyancers can also go back to work, meaning a real kick-start to getting the market moving. An estimated £82bn worth of sales had been put on hold as a result of the coronavirus pandemic. Most of these can now go ahead, which will be a huge initial boost to the housing market as well as the economy.
The new guidance As of Wednesday 13 May, anyone in England can move house as long as they follow the government's new rules. This applies to homeowners, property investors buying new assets, and tenants moving into new rental homes. Housing secretary Robert Jenrick said: "Our clear plan will enable people to move home safely, covering each aspect of the sales and letting process from viewings to removals. "Our step by step plan is based on the latest guidance to ensure the safety and protection of everyone involved.
This critical industry can now safely move forward, and those waiting patiently to move can now do so." Full details of the government's new guidance can be found here. In summary: Initial viewings should be done virtually where possible. For physical viewings, everyone involved must follow strict measures to ensure everyone's safety, such as washing hands and minimising the number of people present. For new-builds, buyers should contact the relevant agent or developer directly to arrange a viewing.
Tradespeople can also now visit properties, but everyone should stick to social distancing and good hygiene measures. Surveyors and valuers can now visit properties, but again this should involve social distancing. Once a sale is agreed, a legal adviser should be able to ensure the contract has enough flexibility so that things can be delayed if anyone contracts coronavirus or has to self-isolate. Movers should book removal firms early, and follow the government's guidance to make it as safe as possible.
The government has also released extensive advice for employers. This includes agents, developers/new-build sales staff, tradespeople, conveyancers, surveyors and EPC assessors, removal firms and landlords. What's the advice for the rental market? In terms of property viewings and moving house, the advice for tenants and landlords is much the same. Another key point to note is that landlords cannot evict tenants until 30 September 2020 under current legislation, unless they have given tenants three months' notice.
Any essential repairs or maintenance must take place with social distancing, by appointment only. Landlords should also consider tenancy check-ins, to find the best solution for everyone's safety. Overall, though, as long as landlords and letting agents adhere to the new government rules, most rental-related processes and activities can now continue as normal. Planning ahead for property investment Buy-to-let mortgage broker Mortgages for Business believes now is a key time for landlords to expand portfolios where they can.
Steve Olejnik, managing director of Mortgages for Business said: “We can’t know exactly what’s going to happen to the market, but we expect a temporary, short-term fall across London and the south east in the region of about 15%. "But there’s no question that if you invest in bricks and mortar now, with a bit of haggling during the process, you are going to see a lot of long-term capital growth. I think values will be back at February 2020 levels by the spring or summer of next year." "Landlords who have not asked for a repayment holiday will be well set to snap-up some bargains with the help of lenders who have demonstrated a willingness to lend since the third or fourth week of the pandemic.
” He adds that traditional buy-to-let is still the top investment choice for most. HMOs (houses in multiple occupation) are also an excellent area to diversify a portfolio, according to the broker. Mortgage rates are currently relatively low for these properties, and they can produce the highest yields of any investment type. BuyAssociation is still up and running, connecting property investors directly with developers across the UK. Browse some of our investment opportunities, or sign up for full access now.