Property market will stay open in second lockdown
Construction sites will remain open and tradespeople will be able to enter homes.
Housing minister Robert Jenrick wrote on twitter: “Housing market update ahead of Thursday’s measures: Renters and homeowners will be able to move; removal firms and estate agents can operate; construction sites can and should continue; tradespeople will be able to enter homes; but all must follow the Covid safety guidance.”
However, it is not clear what restrictions, if any, property professionals will be working under in different parts of the market.
Official bodies, such as the Royal Institution of Chartered Surveyors, said it was waiting for further official guidance from the government.
The Ministry of Housing, Communities and Local Government has been approached for clarification.
Lending to become tougher
The news was cautiously welcomed by brokers and property experts, but they warned that lending could become even tougher as a result of the second lockdown.
Chris Sykes, mortgage consultant at Private Finance, said: “The question remains how many people are going to be out and about viewing property given the circumstances?
“Ultimately, this is likely to entrench the current trends for those looking to move to houses with more space, both outdoors and to work remotely, and means areas outside major cities are likely to see higher demand than pre-Covid.
“A second lockdown and the corresponding economic repercussions are exactly why mortgage lenders have been being cautious of late and this is likely to cement this position for lenders going forward.
“We expect to see further restrictions on borrowing certainly for those with deposits smaller than 20%, with these products almost certainly becoming even harder to find, and those that are available will charge even higher rates to account for the risk.”
Rob Gill, managing director of Altura Finance, added: “Those of us working in the property market are very fortunate as it seems it will stay open during lockdown two, and has been booming over the last few months.
“One big question mark is how lenders, and to a lesser extent conveyancers, will handle the ongoing lockdown measures.
“They’d already been suffering hugely from a service point of view; they now cannot rely on being able to reopen physical offices so this is an issue they need to tackle and solve as soon as possible.”
Worsening service level fears
It’s feared service levels and delays could worsen as buyers rush to take advantage of the stamp duty holiday and Help to Buy before their respective March deadlines.
Jane King, mortgage and equity release adviser at Ash Ridge Private Finance, said: “The property market is allowed to rumble on so I expect no let up from the current madness.
“I do expect that lenders, valuers and conveyancers who have staff back in the office will probably want them back working from home so I expect service standards to slip and turnaround times to get worse from what is already a very low base with some providers.”
King also highlighted concerns with the possibility of removal firms being further disrupted by the virus.
Kate Davies, executive director of the Intermediary Mortgage Lenders Association (IMLA), added: “While the country faces a second national lockdown, the government has rightly decided to keep Britain’s housing market open.
“Lenders, advisers, surveyors, and conveyancers are already experiencing unprecedented levels of demand from consumers eager to take advantage of the government’s stamp duty holiday, which is due to end on 31 March 2021, and also the Help to Buy scheme, which will be available only to first-time buyers from 1 April 2021.
“They now face the task of helping thousands more consumers potentially requesting payment deferrals as borrowers struggle to meet their mortgage repayments during the lockdown.
“Closing the housing market at this time would have only added to this pressure on the sector by creating yet another backlog of demand once lockdown ends.”