We live in uncertain times. With the number of confirmed COVID-19 cases rising by the hour, it’s becoming increasingly difficult to picture what the world will look like in a month, let alone in six months or a year.
Against such a confusing backdrop, making predictions about the housing market or our industry is tough. We just don’t know how tight coronavirus’ grip on our society will get. However, there are a few questions floating around the industry that we can try to answer.
Does the Homebuying Process Count as ‘Essential Work’?
It might seem like there’s an obvious answer to this question, but there’s still a lot of confusion surrounding it. We’ve all heard horror stories about estate agents being ‘forced’ to go to work and even disguising their appearance to fool the authorities by not wearing a suit or neglecting to shave. But the truth is, even the government hasn’t decided whether conveyancing is an essential process.
As of Friday 27th March, the government was still debating the matter. While most solicitors have stopped taking face-to-face meetings and surveyors are refusing to come out to properties, some areas of the industry are still working away. For example, construction workers have been told they can continue to work, provided they remain two metres apart at all times.
Of course, there’s an argument to be made that the conveyancing process is ‘key’. If you’re a homebuyer halfway through a transaction, with all the uncertainty that brings, then it’s going to feel pretty important to you. Similarly, anyone unfortunate enough to be on the hunt for a new rental property when the virus hit is going to need an estate agent, even with a moratorium on evictions in place. Should their needs be catered to?
The truth is, that while we wait on a definitive stance from the government, whether or not you go to work is down to individual businesses. Most people we’ve spoken to are opting to work from home or suspend business for the foreseeable future. And the governments’ recent announcement that letting agents and estate agents will not be required to pay any business rates until next year has only made it an easier decision.
However, there will be some businesses that choose to stay open for as long as government advice remains cloudy and open to interpretation.
How Is It Affecting Transaction Numbers?
According to figures from Today’s Conveyancer, search volume has decreased by a third in the last fortnight as the number of active buyers continues to drop. The overall volume of searches on Wednesday 25th March was down 33.36% on two weeks previously.
So we’re seeing a very real slowdown. This is partly being encouraged by the government, which has issued a plea for stakeholders in the home buying and selling process to do all they can to delay home moves until restrictions to reduce the spread of the coronavirus are lifted.
Secretary of State for Housing, Communities and Local Government, Robert Jenrick even went so far as to say even if the legal exchange has taken place, both parties should ‘amicably agree’ a new move-in date. And UK Finance confirmed that mortgage lenders will do everything they can to facilitate this, by extending mortgage agreements by up to three months until exchanges can take place.
Alongside this, we’ve seen moves from banks and building societies to withdraw mortgage products temporarily to focus efforts on their existing pipeline.
The good news in all this is that by shifting their focus to already existing transactions, lenders will at least keep some work moving through the industry. What’s more, with everyone focused on getting a few transactions over the line, perhaps we’ll see them processed faster than they would be ordinarily.
The obvious downside is that we face a race against the virus. If everything outstanding is completed before COVI9-19 burns itself out, the industry may grind to a temporary halt.
What about Land Charges?
This is a tricky one. Every local land charges department we’ve come across has sent staff home to work remotely in one form or another. Although some facets of local government are considered key, local land charges, justifiably, isn’t one of them.
Where things become a little murkier is what services local land charges will provide remotely. Most local land charges are currently unable to process official or personal search requests at the moment. This is, of course, down to the difficulty in accessing registers and documentation when staff are at home working with outdated equipment and systems.
However, some councils are providing assistance for outstanding or urgent searches, while others have effectively closed for the duration of the crisis. So whether you’re able to get urgent local authority searches processed will largely depend on the council you’re dealing with. In some cases, you may even get them back faster than you would normally.
So What Can Conveyancers Do?
Given the seemingly contradictory advice coming down from the government, you could be forgiven for wondering what conveyancers can and can’t do. So here goes…
While strongly discouraged, moves are still permitted to take place ‘where the move can be done safely’ with all work adhering to guidelines such as ‘maintaining a 2-metre distance from others.’ It’s also important to note that, while it’s been underreported, the police have been granted exemptions to waive new enforcement powers concerning breaches of the new rules on social distancing, one of which is for ‘urgent moves’.
On top of this, conveyancers have been asked to prioritise the following:
- Supporting the full sales process for unoccupied properties and advising clients that they will be able to move if all advice is followed regarding social distancing
- Encouraging transactions due to complete in the days ahead to delay the process while the stay-at-home period continues
- Advising clients who are ready to move not to exchange contracts on an occupied property unless they have made explicit provision for the risks
- Prioritising support to anyone with symptoms, self-isolating or shielding from the virus and those they are in the chain with, and do all they can to help a new date to be agreed in these circumstances
We face an uncertain few months. Lenders are suggesting that finance will be limited until restrictions are lifted and resources ploughed into mortgage break enquiries rather than new transactions. Meanwhile, the restrictions placed on surveyors and the closure of land charges makes the basic process of home buying and selling tricky.
Yet, for all the uncertainty, perhaps there are some positives. The industry will likely continue working in some limited way for the next few months as it works through outstanding or urgent cases. And it offers us all a chance to step back, reset, and consider how we do things. It’s also possible that policy like mortgage payment deferrals may win back some much needed public trust for lenders.
Of course, times are tough, and we may have to endure a difficult summer of economic uncertainty. But as we’ve said before, the housing market is incredibly resilient. Maybe, just maybe this is simply another hurdle for it to overcome. We live in hope.