Working in the property world – during and after lockdown
2 June 2020
In April, sales of UK residential properties hit their lowest level since records began - less than half the number seen in the same month last year.
The hope is that any missed sales will be picked up when the market opens up again, but what have those who work in the property market been doing whilst waiting for this to happen?
As a solicitor in the residential property team at Wilsons, I have been trying to keep deals alive and moving forward as much as possible and now, with the slight relaxing of the rules, the majority of my matters have been able to progress towards completion.
I recently took the opportunity of a quieter day to speak to a couple of my property contacts to find out how they have found the lockdown period, including how their day to day life has changed now that the restrictions have been lifted slightly.
First I spoke with Fiona Pengelly, an estate agent from property consultants Strutt and Parker.
How busy were you during lockdown?
With the number of sales and viewings being very low, this has been a good opportunity for agents to ensure their database is fully up to date so that they can track the changes in growth and provide accurate projections. They record details of the sales which have gone through and clients who are currently marketing their properties.
Many clients have been able to spend time in their gardens so another task has been to ensure that these are captured by photographers (while social distancing) so that the property can be shown in the best possible light.
Finally, the personal service usually provided to clients who are selling their homes has been adapted to include volunteering for food deliveries to those clients in this current crisis.
Is my house worth less now?
So many buyers are asking for some (or a lot of) money off the price they had agreed before lockdown. However in one case Fiona was able to find and secure a second buyer after the first asked for a reduction which their client was not willing to accept, so it’s not necessarily the case.
One final gem I picked up from Fiona related to the 360º virtual viewings they can do. The camera is placed on a tripod in the middle of the room and the images are used to create a virtual tour of the property. However, despite these virtual tours and all the information you can find online regarding a property and the surrounding area, it is still really important to speak to the agents directly before you miss an opportunity to secure the property.
My second chat was a zoom coffee with Shelly West, a local mortgage broker. She was also fairly positive about the post lockdown climate.
Keeping with the trend, Shelly was still busy during lockdown, keeping in contact with current clients as well as those who had taken out mortgages in the last couple of years.
Many discussions have been around mortgage payment holidays which have caused some confusion as many clients don’t realise the possible repercussions of taking a break in your payments.
One example was that some lenders initially stated that taking a payment holiday would prevent them making a product switch if they were at the end/near the end of their term. Some lenders have since changed their stance on this but it is important to speak to an adviser before making any snap decisions.
Have things now leapt back into action?
Yes! Since the new guidance announced that valuations can now go ahead, where it is safe to do so, the market is starting to pick up. However, it is important to note that many lenders changed their lending criteria at the start of lockdown and are only gradually changing them back again.
Speak to a broker but they may suggest waiting a few more days or weeks to see what lenders are doing. It is important to remember that some lenders may give you the LTV (loan to value) ratio you are looking for but they may be more expensive in the long run, and waiting for other lenders to revaluate and possibly relax their criteria may be the best option.
Finally, some local estate agents have discussed the possibility of making sure that a prospective buyer can provide an offer in principle before they are allowed a physical viewing of the property. There will so many extra steps involved in viewing a property that agents (and sellers) want to ensure that the risk is only being taken for a serious buyer. However, again with lenders currently changing their criteria, you may find that the offer in principle is no longer valid or there may be a better lender/product available when you come to submit your application.