What Will Happen to the Housing Market When the Stamp Duty Holiday Ends?

One of the few silver linings of the last year has been the resilience of the housing market. Despite predictions of a major slow down or even a crash, the sector has rebounded with a speed that’s surprised us all. 

What consultancy Oxford Economics has called ‘a very peculiar housing boom’ has so far relied on a perfect storm of favourable factors. These include typical home buyers (often middle-aged and financially secure) being less likely to lose their jobs, foreign capital continuing to flow, pent-up demand following the first lockdown, and the stamp duty holiday unveiled by Chancellor Rishi Sunak back in July 2020

This has allowed the UK housing market to remained relatively insulated from the travails of the wider economy. And even post some frankly astonishing figures, such as the Nationwide building society’s October report which revealed an annual price growth rate of 5.8% – the highest in six years. 

However, a central plank of the market’s recovery is set to be removed in just over a month. March will see the end of the stamp duty holiday and, as yet, there are no plans to continue it. So, what does this mean for the market? Can we expect it to remain buoyant? Or are we set for another fall? 

The Case for a Crash 

Unfortunately, we have to start by looking at the worst-case scenario. The sudden removal of a policy that has provided a fuel injection to a flagging market could spark a collapse in house prices.

The problem is that, although the end of stamp duty alone probably isn’t enough to cause a full-scale crash, when combined with other factors it might. The UK has rising unemployment, economic uncertainty, and a falling population in London. And all of these things are also likely to reduce the number of potential homebuyers and put the squeeze on demand.

In particular, the 700,000 people to have left London since the outbreak of the pandemic is a real worry. Many of these people are young, EU nationals who – due to Brexit – aren’t necessarily going to return once COVID-19 is brought under control. These people along with their British-born counterparts (who due to the normalisation of remote working also have less incentive to return) are crucial to London’s rental market. 

Without them, we could see a glut of former buy-to-let properties being put on the market as the renting loses its allure for landlords. This, in turn, would drive prices down across the board.

When you combine this with unemployment and the end of the stamp duty holiday, it suddenly looks like another perfect storm gathering – only this one could crash the market instead of saving it. 

Reasons to be cheerful 

Now, for some reasons to remain upbeat. First, the current Conservative administration has a penchant for last-minute decisions on crucial fiscal policy, especially when there’s public pressure involved. For evidence just look at the U-turns on extending the furlough scheme or free school meals. Even if at the moment an extension of stamp duty exemptions looks unlikely, that might not be the case come March.

Alongside this, although we’re almost going to see some drop-off, many, many things have to go wrong for a full-scale crash. For the market to really be in trouble, we’d need to see home buyers facing severe difficulties paying their mortgages. This typically happens for two reasons: an increase in interest rates or large-scale job losses amongst the middle-aged and middle class. 

With interest rates at record lows, the former is very unlikely. As for unemployment, it is true the UK is facing a crisis. However, thus far, job losses have mostly been confined to hospitality and service sectors, both areas of the economy that typically employ young and disadvantaged people who aren’t likely to purchase a house any time soon. Whatever this says about our society (and it is damning), it at least provides some hope that homebuyers, who typically have excess capital such as savings, might emerge relatively unscathed. 

Finally, while it might not look like pretty right now, would a slowdown leading to a drop in prices be the worst thing for the market long-term? It could offer a way into the lower end of the market for first time buyers and, in time, push demand back upwards a little more fairly. Perhaps a slowdown in 2021, painful though it might be, is the correction the market needs to return to better health in 2022.

For now, we wait to see what the Ides of March bring. 

How Will the New Tier System Affect Conveyancing Turnaround Times?

Depending on where you live in the UK, the last few days have either been a long-awaited chance to see loved ones, eat in a restaurant, and engage in some retail therapy or the beginning of another long period inside. 

But while we’re all aware of the social and personal costs of the government’s new COVID-19 tier system, there’s been less written on its impact on individual sectors of the economy (outside of retail and hospitality). And you’ll find even less information on what it means for conveyancers.

We’ve discussed COVID-19’s likely effect on house prices and market activity in previous blogs. This is largely because it’s far easier to find data at the macro level of the market. A simple Google will tell you most of what you need to know. 

However, conveyancing has always been a business dependent on speed So, this week, we’re looking at the possible effect of the new tier system on turnaround times. And, because this can either mean the time local authorities and search providers take or transaction times themselves, we’ll take each in turn. 

Local Authority Turnaround Times

The speed local authorities can turn around official searches has always been highly variable. For example, if you’re moving within Boston Borough Council’s catchment, your local search can take up to 34 working days, whereas if you’re moving to York it’ll take just one day. 

Even within a single city, lead times can fluctuate wildly. If you’re moving to Hackney, it’ll take on average 141 working days to get a completed search. But if you’re heading west to Hammersmith it’ll take less than a tenth of the time.

While it might be frustrating for homebuyers and anyone involved in the conveyancing process, it’s sadly a natural part of working alongside public sector bodies. Local authorities have different levels of funding, workloads and staff numbers. Hackney Council could be dramatically slower than Hammersmith for any number of reasons. But it’s due in part to it being one of the largest London boroughs and the site of rapid redevelopment – stretching the staff at the local land charges. 

COVID-19 simply exacerbates the inequality between local authorities, many of whom will have had to furlough staff or adopt remote working, not ideal working conditions for any organisation. And things are even harder for those councils in tier 3 areas who are subject to tighter restrictions. 

Local authorities such as Liverpool, Leicester and West Lancashire that currently complete searches reasonable quickly are likely to see a slowdown while under restrictions. Again, this could be for several reasons. For instance: staff shortages due to furlough and sickness or attempting to fulfil their search obligations remotely with all the technical problems that entails.  

Personal or regulated search businesses may be able to pick up some of the slack. We’ve long been lauded for our ability to pull rabbits from hats and turn searches around faster than local authorities. What’s more, at least some of the information is held digitally by the Land Registry, removing some of the need to go to the local authority. 

Nevertheless, without proper access to local authorities’ CON29 data, it’s tricky. So, expect delays in some areas to worsen until early 2021. 

Search Providers

What about all the other searches that go into the conveyancing process? Water? Coal? Subsidence? 

Well, although we won’t name names, much like local authorities some of the businesses who produce these searches are struggling. Some are in areas with stricter lockdown measures preventing staff attending the office. Others have staff shortages due to furlough schemes or, in the worst cases, redundancies. 

Naturally, these conditions lead to slower services and delays. We’ve yet to encounter delays on the scale seen at local authorities, but it’s clear some businesses are having a tough time of it. 

Transaction Times

Finally, let’s take a look at overall transaction times. 

Interestingly, transaction times have been providing conveyancers with some all-too-rare good news during the pandemic. Lead times have slowed, Investec, HSBC and Santander have all reported delays. And, as a spokesperson for the Building Societies Association (BSA) told Today’s Conveyancer

“Clearly resource management amongst all parts of the chain has been key – particularly as everyone has been impacted by the number of staff who need either to self-isolate or who are unwell because of the virus. Buyers and sellers contracting the virus or needing to self-isolate have also been a factor.”

However, delays have been small, usually in the region of 1-4 days on average and the outlook is getting brighter by the day. Many of the same banks and building societies we mentioned earlier are now reporting improvements, with some even stating lead times are within the normal range. 

There are understandable concerns about the impact of the new tier system on lead times. Conveyancing has always been a bit of a postcode lottery, with the time it takes to complete heavily influenced by where you’re moving to. And the pandemic has indeed worsened some of the industry’s existing problems. 

But despite this, the industry has managed a once-in-a-generation disruption far better than many would have predicted. So, with a vaccine just around the corner, perhaps we should view the tier system as one last hurdle to clear before normality can resume. Of course, delays are inevitable and it may well take some local authorities until summer 2021 to clear their backlog, but the future suddenly looks much more hopeful.

Is Remote Working the Future of Conveyancing?

Are you feeling a sense of Déjà vu yet? 

As England returns to a nationwide lockdown, many of us are returning to our hastily prepared desks in the spare room and heading back in time to March 2020. But, rather than a temporary inconvenience, is our current situation a foretaste of what’s to come? Could remote working be the future of conveyancing?

The Case for Remote Working 

Let’s start by asking another question. How much of the conveyancing process really needs to be conducted in an office? 

Since midway through the last decade, the industry has been slowly – and at times painfully – been moving towards a digital future. On the lawyers’ side, the first electronic mortgage was completed back in 2018. And, while digital mortgages aren’t due to become compulsory anytime soon, it’s not hard to imagine them being used more widely in the future.

What’s more, despite concerns about compliance, electronic signatures are well on the way to being commonly used. Transfers of land and charges must be made by deed. In other words, they need to be signed, witnessed and attested. So, naturally, many conveyancers worry about how they can be compliant with the legal requirements for execution remotely. 

However, this hurdle can be cleared using the government’s ‘Verify’ service – an online application that checks identity. It’s the service you used if you’ve ever applied for a driving licence or passport online. It works by an individual signing up to an account with a government identity provider before having their identity verified against credit agency or mobile phone provider data, a process that takes 5-10 minutes. 

Services like Verify remove the need for conveyancers to meet clients and witnesses in person, without the compliance risk this would usually entail. 

But it’s not just conveyancers who are benefitting from new technology. The Land Registry began its process of digitising and centralising the LLC1 back in 2018. And, although the process has been fraught with difficulty, eventually, search agents will be able to access instantaneously LLC data online – removing at least some of the need to visit local authorities in person. 

What Needs to Happen to Get Us There? 

So, if much of the infrastructure for remote conveyancing is already there, why is the industry much the same in 2020 as it was in 2010? Well, unfortunately, there are still a few vital missing pieces.

Digitise the CON29 

This one’s pretty glaring. From a search agent’s perspective getting LLC1 data digitally from the Land Registry while still having to source CON29 data from a local authority, actually makes the process more difficult. Admittedly, some councils offer the CON29 digitally, but many more don’t. For search agents to work from home permanently, all data needs to be accessible digitally and preferably from one central source. 

Improve Trust 

For all its strengths, the legal sector has never been one for rapid innovation or embracing change quickly. So while digitised processes like electronic mortgages and signatures are now a reality, until there is widespread trust in them they’ll never be fully adopted. More needs to be done to demonstrate to the industry as a whole that tools like Verify are not only safe and reliable but also convenient.

Alongside this, there’s an urgent need for government legislation to clarify the legality of many of these tools. Doing so would be a major step towards the whole industry embracing remote working.

More Technology

Although progress has been made, the tools required for real digital conveyancing are still in their infancy. If one of the greatest concerns about electronic conveyancing is security, then it stands to reason that’s it’s this area which will need to see the most rapid developments. We’ll need tools like biometric or retinal scanning and a whole host of anti-fraud measures if electronic conveyancing is to take off. 

Get Buyers Onside  

In much the same way as the legal industry, buyers will need to fully trust the process before they use it. After all, no one wants to risk the biggest investment of their life on processes and technology that’s still in its beta phase.

 It’s a bit of a chicken and egg scenario. Conveyancers can’t iron out the wrinkles in digital processes without real transactions to test them on, but buyers won’t use the technology until they’re confident it’s safe. As with conveyancers, the key to building confidence among buyers is a strong, clear signal from the government, most likely in the form of legislation or a campaign.

Meeting these requirements could take a couple of years or a decade. Fully digital conveyancing is probably inevitable, but it’s a question of appetite for change – does the industry have it? And will the government stand behind new technology to build trust? If not, could COVID-19 and the sudden need to do things differently provide the catalyst? 

We’re about to find out. 

Will the Housing Market’s V-shaped Recovery Last?

We’ve talked a lot recently about the UK housing market’s seemingly miraculous immunity to COVID-19. But in case you’re unfamiliar with what’s going on, the story is as follows. Unlike the wider economy, which is currently in the throes of a potential double-dip recession, the housing market is flourishing. 

Data from the Royal Institute of Chartered Surveyors (RICS) shows buyer enquiries recovering strongly in July which, due to transaction times, is positively influencing sale prices in September and early October. Meanwhile, Google search data reveals that as recently as early September, buyer interest remains well above pre-pandemic levels. 

This has led many commentators, including the Bank of England, to label the phenomenon a ‘V-shaped’ recovery. But can the recovery last? Or are will the housing market eventually succumb in the same way the labour market and wider economy has? Let’s look at the case for continuing recovery and the case against.   


Perhaps the best indicator that the recovery could be here to stay is that current activity isn’t being driven by backlogs. It was easy to put the initial bounce in activity we saw in the summer down to the pile-up of incomplete transactions from earlier in the year. However, even the most sluggish of transactions in the backlog would have completed by early August. After all, the housing market reopened in May. 

Yet, the housing market continues to surprise. The building society, Nationwide, reports that UK house prices hit an all-time high in August. What’s more, Zoopla announced that the number of sales agreed in August were 76% above their five-year average. This, coupled with the Google search data we mentioned earlier, appears to point to a positive outlook for the rest of the year. 

There could be several things driving these impressive numbers. It could be lockdown-induced itchy feet from buyers in smaller properties. Or maybe it’s down to middle-class urbanites taking the chance to move out of major cities as the switch to remote working continues (as we covered recently ). Perhaps it’s simply a case of those with capital seeking to invest in property – always seen as a safe option in a downturn. 

Or maybe, just maybe, we’re headed for a fall. 


Sadly, it’s time for some gloom. We know you’ve probably had enough to last a lifetime but, for the sake of balance, we need to cover why the V-shaped recovery could turn out to be a W.

In a w-shaped scenario, the peaks we’ve seen throughout the summer begin to gradually decline as we hit mid-to-late autumn. The theory goes like this. As pent-up demand for housing begins to subside, the housing market will begin to rely on ‘underlying’ demand. Or, to put it another way, the demand that isn’t being driven by delayed existing transactions from earlier in the year. 

Most commentators think this underlying demand remains weak. Add this to conditions that include a weakened economy, tight credit conditions, mortgage lenders nervous about the future, and the end of stamp duty, and you have all the conditions for price stagnation in 2021. And this is before we even consider the dreaded ‘B-word’ and its potential effects on the housing market. 

Some housing market experts have been predicting this for a while. JLL, the American commercial real estate services company, has long suggested that the UK could see an 8% drop in house prices by the end of 2020. Business management consultants, Capital Economics, go even further – predicting a year of stagnation in 2021. 

Nevertheless, there is an upside to all this. The more eagle-eyed among you may have realised that for market activity to form a W, we need an upward trajectory once the decline and/or stagnation ends. 

If we zoom out for a moment and look at the bigger picture, one of the longer-term effects of the COVID-19 has been to transform the way we all think of the workplace. It’s also very likely that these changes will be permanent. In short, many of us are going to be working from home (at least some of the time) from now on. 

As we’ve already seen on a smaller scale with wantaway Londoners, this has the potential to trigger a structural increase in housing demand. Many people will be looking at the four walls they’ve spent much of the last year within and decide it’s time for a change – whether that’s buying a first home, moving out of the city or just moving somewhere a little bigger.

Of course, for this to really take off, confidence in the economy, labour market and housing will have to return. This will take time, and could mean a tough year for conveyancers, but the green shoots of a potential recovery are already there.

So, conveyancers take heart. A W might not be quite as promising as V, and things might have to get worse before they get better, but both lead to a recovery in the end. 

Could London See an Exodus of Homebuyers?

A recent poll conducted by the London Assembly Housing Committee reveals that one in seven Londoners (14%) want to leave due to the COVID-19 crisis. Could we see an exodus of buyers to the home counties and beyond? And, if so, what does this mean for house prices and the market?

Let’s picture a scenario. 

It’s a normal Monday afternoon, sometime in 2026. You’re heading home from the office after a long day. A COVID-19 vaccine was found a couple of years back so, although you’ve never returned to the office fulltime, you head in once or twice a week.

On your way into the station, you pick up a copy of The Evening Standard. The front page screams ‘London property prices fall for the fourth year in a row’. You’re headed back to your newly purchased home in one of London’s trendier boroughs, let’s say Hackney or Southwark.

Just a few years ago, purchasing a house in this part of town was an improbable dream for all but the wealthy and those fortunate enough to have inherited money. But that’s all changed. 

Your area is now full of new homeowners. Young professionals. Families. Lifelong Londoners. The bad old days of ordinary Londoners being forced into decades of precarious renting have passed. The city is one again a place where people can settle and put down roots.

As a result, local communities are thriving. Your neighbours recognise you on sight. People smile at you in the street. 

Commentators put London’s transformation down to two things. First, the exodus of middle-class professionals to Kent, Hampshire, Essex and beyond in the wake of COVID-19. Second, the falling demand for housing this caused and the corresponding drop in prices, making housing more affordable for those that stayed. 

Sounds fanciful, right? However, if the last few years have taught us anything, it’s that what seemed impossible a decade ago is today’s reality. So, could it happen?

The Case for Falling Prices 

The case for falling house prices is a simple one. The COVID-19 crisis has caused the UK economy to contract 20.4% in the second quarter of 2020. This followed a 2.2% contraction in the first quarter. And, where the economy leads, the housing market isn’t far behind. 

JLL, the corporate real estate services company, has predicted an 8% fall in property prices for 2020. Meanwhile, according to the Royal Institute of Chartered Surveyors (RICS) London house prices continued trending downwards, even during the easing of lockdown measures between July and September. This makes London the only region across the UK to still experience price falls. 

At the same time, there’s been a near-universal shift to remote working in white-collar jobs. This has led to many middle-class professionals (who make up a large proportion of London’s homebuyers) considering whether they need to live in London at all. After all, why live in London when you could do your job anywhere and get considerably more for your money elsewhere?

The number of job seekers wanting to leave the capital more than doubled in June,  according to the Escape the City careers advisory service. This has been mirrored by a doubling in the number of buyers registering outside of the capital throughout the summer. 

The theory goes that economic contraction and an exodus of the middle classes work in tandem to create a fall in demand for houses, particularly at the lower end of the market. In turn, this leads to a drop in house prices, making housing more affordable for first-time buyers. Eventually, you end up with a scenario like the one we explored earlier.

It’s a crude theory, but certainly not impossible. What about the case against? 

The Case Against

Although the idea of London becoming an affordable city to live in might be a nice one, it’s also very possible this lull in growth is temporary. 

Many analysts are predicting a strong recovery in the London housing market as early as 2021. Estate agents, Knight Frank, forecasts that London house prices will jump 6% next year. Meanwhile, their competitor, Chestertons, predicts growth for inner London between 3% and 4%. There are a few reasons why this could provide a more realistic picture. Let’s take each in turn. 

Firstly, the sheen might have worn off living in London during COVID-19, but the city remains one of the most desirable in the world. Were a vaccine to be found for COVID-19, London would quickly return to its role as the cultural and financial epicentre of the UK. With London back in business, pre-COVID demand and prices would quickly follow.

Second, we may not yet have seen the full effect of either the Stamp Duy Holiday (which doesn’t expire until March 2021) or conveyancers clearing their backlogs in the capital. 

Lastly, the role of foreign capital in inflating London prices can’t be ignored. Middle-class homebuyers are only part of the story, just as important are overseas investors who are largely responsible for spiralling prices over the last decade. 

Brexit’s fast-approaching conclusion will play a part in this. Should the UK crash out with no deal, investing in London property could become very appealing for buyers from nations with stronger currencies, leading to a mini-boom and higher prices for domestic homebuyers. 

Of course, both the possibilities we’ve discussed rest on what happens in the rest of 2020. Are we about to enter a second nationwide lockdown? Can a vaccine be found? Will the double-dip recession many are predicting come to pass? And what will the outcome of Brexit be? 

Without an answer to these questions predicting the future of London’s housing market is tricky. However, one thing’s for certain: whatever happens in the next six months will shape the city’s future for decades to come. 

How Well-insulated is The UK Housing Market Against a Second Wave of COVID-19?

The housing market has surprised us all in the last few months. Even the most bullish commentators couldn’t have predicted how resilient UK housing has proved. At the time of writing, the market is performing at close to 75% of 2019 norms.

Not bad, especially when you consider the once-in-a-generation disruptions the last few months have served up.

Yet, for all the positivity it’s hard not to worry that we haven’t seen the last of COVID-19. We may try to push it to the back of our minds. We may do our best to live for today. The frenetic activity in conveyancing departments across the nation certainly speaks to that.

However, most epidemiologists concede that a second wave is entirely possible, or even likely. If the worst should happen, how well-insulated is the housing market against a second period of disruption?

The Worst-case Scenario

Let’s start with the worst possible outcome. It might be tempting to assume that the housing market will simply stall for a while, then resume normal activity once the peak of the second wave has passed. After all, that’s exactly what happened back in June.

But there’s a key difference between the late-August and early-June. The state of the UK economy.

Of course, commentators have been concerned about the UK economy for much of the last decade. What’s different this time around is that a double-dip recession is no longer a spectre haunting economists’ dreams. It’s here.

According to the Office for Budget Responsibility (OBR), the UK could be facing the worst recession since records began. To put that in context, we could see 12% unemployment and a 35% contraction in GDP by the end of 2020.

You don’t have to be an economist to conclude this is bad for the housing market. Very bad. Mass unemployment means fewer people able to buy houses. And, even those that can afford it may well opt to sit out the storm and delay their purchase.

Nor is a recession likely to have a positive impact on house prices. Without a high-demand for property (outside the rental sector, at least), there’s little to drive values up. Admittedly, they’re unlikely to fall dramatically either as new build projects stall, but that’s no real solace to developers, conveyancers and estate agents.

In this context, a second wave could be disastrous. The combination of a flatlining economy and a return to lockdown could send the UK housing market into a deep freeze for months or even years.

A More Hopeful Picture

Despite all that doom and gloom, there are a few reasons why the housing market might yet prove resilient.

The first is the likely nature of any second wave. Although many of us are still susceptible to the virus and a vaccine is still some way off, that doesn’t mean it has to be as bad as the first time around. According to many scientists, provided the government eases its way out of the current lockdown measures (you be the judge of whether that’s happening), a nationwide shutdown doesn’t have to be inevitable.

Instead, we could well see a series of local lockdowns through the winter. As for how that would look, you need only look at Leicester, parts of the North West, and Aberdeen. This means that while local lockdowns would be terrible for conveyancers in the towns and cities affected, the impact on the market as a whole would probably be negligible.

The second factor worth considering is history. The UK housing market has proved itself remarkably durable in the recent past. Most notably in the months following the last wave, but also in the wake of the 2008 financial crisis. Its entirely possible that we could see a short period of stasis, followed by a return to something like normality very quickly.

Finally, there’s the wider question of how tied the UK housing market is to consumer spending anymore. Of course, it makes perfect sense that low-spending power among UK consumers equals poor demand and falling house prices. But, although this is partly true, it ignores the role of overseas capital in the market.

One of the key reasons house prices and activity remained relatively stable during the austerity decade (2008-2018) was foreign investment. Whether the same is true in the years ahead will largely depend on the outcome of Brexit and how hard the recession bites globally. However, it at least provides another cause for optimism for UK conveyancers.

Uncertainty Reigns

The truth is the next few years are a leap into the unknown for UK housing. On the one, hand there are few positive economic forecasts to be found at the moment. On the other, the market has proved resilient in equally dire circumstances in the past. So, perhaps the best advice we can give to conveyancers is to enjoy our current period of sunshine, however long it lasts.

Assessing the Stamp Duty Holiday.

Last week’s announcement of a holiday for stamp duty land tax (SDLT) on properties seems an obvious fillip for the housing market. Implemented as part of Chancellor Rishi Sunak’s summer statement, the tax break means that until 31st March 2020 anyone buying a home will only be required to pay SDLT if the value of the property exceeds £500,000. So far, so positive, but will the cut will have any long-term impact on the market. Is it anything more than a sticking plaster on a wounded economy? Starting off with some optimism; any extra stimulus of the market is welcome, particularly after the cryogenic freeze Covid-19 applied to it. 

What’s more, so far it’s worked. Rightmove has reported traffic to its listings increased by 22% immediately in the wake of the chancellor’s announcement of the £3.8bn tax. The property website said it received 8.5m visits, the highest in its 20-year existence. The number of people phoning and emailing estate agents via the site also hit a record high and was up 93% on the same day in 2019.

The announcement met with similarly spectacular results across the whole industry, with everyone from comparison site Zoopla to estate agents Winkworth reporting a dramatic uptick in interest. 

All of this points towards a short-term boost for the housing market. Add to this that positivity was rife in the market before the SDLT announcement, and the short-term forecast for property looks decidedly sunny. 

However, as always, there are some potential drawbacks to the scheme. The first is a question of fairness. While the SDLT cut is a welcome relief for the industry, it seems highly unfair that those who purchased property since the start of lockdown proceedings in March – at the urging of the government – aren’t subject to the same benefits. Do those people who risked infection and financial uncertainty while making their contribution to the health of the market not also deserve a break?

Of course, any scheme like this needs to be time-limited, but how hard or costly would it be to backdate the tax break – as many conveyancers are calling for – to the beginning of the lockdown period? 

The second major drawback is the scheme’s focus. We shouldn’t ask too much of a tax break, it’s not designed to be a root-and-brach overhaul of housing policy, but it is worth asking who is this for? 

The policy does little to address the housing market’s fundamental problems. The industry still faces issues with supply, mortgage availability, rising house prices, and high barriers to entry for first-time buyers (who, incidentally, are likely to be hardest hit by an economic downturn). 

This seems compounded by the fact that the measures extend to help those buying a second home or investment property. Is this really the part of the market that needs a leg-up?

Finally, it’s worth asking whether the reduction is enough to spark the confidence potential buyers need to sign up to the long-term liability of a house purchase? Many people will, understandably, still want to wait and see how the economic situation develops over the next six months. After all, the ghosts of 2008 still loom large in the public consciousness. 

None of this is to denigrate a much-needed boost for the housing market, on balance, the reduction is a good thing. However, it’s clear that if the sector is to continue its surprisingly positive trajectory, we need more. Much more. 

Is the Housing Market Really ‘Back’?

It’s been over a month since the Secretary of State for Communities and Local Government, Robert Jenrick, officially re-opened the English property market by lifting restrictions on estate agents and the buying and moving process. 

It was the announcement we’d all been waiting for and the industry breathed a collective sigh of relief at the end of the seven-week freeze. Perhaps things were finally returning to some semblance of normality.

But where are we nearly 6 weeks later? Is the housing market really ‘back’ in any meaningful sense of the word? And what can we expect for the rest of 2020 and beyond?

The Rebound

As of early June, the property market appears to have simply picked up where it left off pre-pandemic. Figures released by TwentyCi group reveal that the exchanges are being recorded at 68% of the same period in 2019, not bad given its two-month hiatus. Meanwhile, the market as a whole is operating at around 75% of the norms we saw throughout 2019.  

And this sunny outlook is being replicated elsewhere too. The Yomdel Property Sentiment Tracker is claiming that demand from vendors and landlords has risen to all-time highs. It’s results for the week ending 7th June show new enquiries from vendors seeking valuations skyrocketing. 

The number of vendors seeking a valuation rose 34% to hit 85% above pre-coronavirus levels. It appears that having put moving plans on hold, people are swarming onto estate agents platforms in a bid to get things moving again and into a new home before the summer is over. 

The Future 

So if the present state of the property market looks hopeful, what of the future? Well, it’s ultimately pretty mixed. Although, nothing like as bad as might have been expected after the last few months.

National estate agency, Savills, produces an annual five-year prediction for the housing market and has revised it’s November 2019 edition in light of the coronavirus pandemic. This new version makes for very interesting reading.

The property giant expects UK house prices to dip slightly throughout the rest of the year, dropping by 7.5% by the end of 2020. However, perhaps more importantly, Savills is standing by its original prediction of a 15.1% growth across the country by 2024. After the -7.5% fall this year, the data predicts a bounce-back of 5% for 202, followed by house prices rising by 8% in 2022, before returning to a steady 5% and 4.5% for the following two years.

Savills puts this bullishness down to factors such as better mortgage affordability and a ‘backlog effect’ of pent-up demand for UK housing. It also expects the market to closely shadow UK GDP, which is expected to fall during 2020 and bounce back in 2021. 

However, all this good news should come with a side of caution. There are still some major challenges ahead. 

Firstly, payment holidays are still in place for as many as one in seven mortgages. It remains to be seen how smoothly these will transition back to normal payments once things stabilise, particularly given we’re likely to see a tough employment market for the rest of 2020 and beyond. 

There’s also the first-time buyer elephant in the room. Demand for first-time property far outstripped demand pre-coronavirus, and this has only been made worse by months of downtime. Many lenders are withdrawing from the 90% LTV market, making it even more difficult for new buyers to get onto the ladder. Indeed, only 50% of mortgage products available pre-COVID are still on offer. 

On top of this, we still aren’t building enough new houses. The new-build market, which was already struggling to meet the number of properties required, has been set back further by a nearly two-month pause. It’s worth noting, however churlish it might sound, that all the demand in the world isn’t much use without a steady supply of new homes. 

Finally, it’s important to note that we just don’t know what comes next. The rest of this year could see the UK economy rally and return to the growth we saw pre-COVID, or it could be hit by a hard Brexit (yes, that again) and a debt crisis. As things begin to return to something like normality, let’s all pray it’s the former. 

What Easing of Lockdown Means for Conveyancing?

We’ve entered a new stage in coronavirus crisis. Some call it the easing of lockdown, others (mainly just those in Whitehall) call it ‘the second phase’. Whichever you favour, with the UK government announcing a partial easing of lockdown on measures on Sunday, it’s clear we’ve started, albeit very cautiously, down the long road back to something resembling normality. 

As the government advises some elements of the economy, including, crucially construction workers, to return to work where possible, where does this leave the conveyancing sector? Of course, we’re a long way from where we were in late 2019, or even early 2020, but where do we currently stand. 

Supply Chains

The part of Sunday’s announcement which will have provided most cheer for the property sector is the advice for construction workers to return to work where possible. At the start of the lockdown period, many had feared the supply of new build properties could be hit for years to come.

While it’s true that most construction sites have been closed since late March, as things currently stand, disruption may be much less than initially feared. Some developers such as 

Taylor Wimpey, Persimmon and Redrow, plan to tentatively reopen this month, with extra safety measures in place. And, provided we don’t experience a ‘second wave’ forcing the resumption of lockdown measures, the supply of new houses could emerge from the crisis at only slightly lower levels than it went in. 

However, obvious concerns about how ‘under control’ COVID-19 really is aside, there’s something else worth mentioning. Building materials. Although, many construction manufacturers and suppliers have weathered coronavirus surprisingly well, disruption to supply chains could continue for some time yet. This is particularly true of those businesses dependent on imports from China and other international markets. 


What about prices? Well, that depends on who you listen to. Savills has predicted falls in London of between 5 and 10% for the rest of the year, (although it also expects a 15% rise over the next five years. It also says property searches on its website are up 16% in recent weeks, and now stand 7% higher than before the current crisis began, promising a relatively swift return to normality. 

The BoE, however, predicts a 16% fall for the rest of 2020, which would put us in 2008 territory. Yet some commentators, most notably two analysts on CNBC, suggest that UK house prices will only fall ‘modestly’ in the next few months. 

The truth is we just don’t know. If the lockdown is extended into the summer things will begin to look very different and the industry will be forced to re-forecast. But, equally, we could also be looking at something approaching normality by the end of the summer. In such a changeable environment, coming up with any concrete predictions is tough and a little unwise. 

Transaction Numbers

Lastly, transactions numbers. Rather predictably, they continue to fall as lockdown eats into another month. Property portal Zoopla suggests around of 373,000 purchases are on hold due to COVID-19, and estimates put the value of these transactions at £82 billion. On top of this, it also expects transactions numbers to be half what they were in 2019. 

Meanwhile, Knight Frank is predicting the number of home sales in 2020 will decline by £526,000, a drop of 38% on 2019.

While that makes for gloomy reading, it’s important to stress that there are also a few causes for optimism. Firstly, because at some point, be it in late 2020 or early 2021 things will start moving again. When they do, conveyancers everywhere will have a backlog of stalled transactions to work through, as well as all those potential buyers who put it off due to COVID-19 uncertainty. 

Second, the new build market could soon be open for business again. Many estate agents have begun offering virtual tours to buyers to get around social distancing rules. What’s more, as we mentioned earlier, the construction industry is clunking back into gear, promising at least some supply of new homes. 

And, finally, discussions have begun about what we can do to get things moving again even if social distancing rules remain in place for the rest of the summer. The conveyancing industry has innovated in the past to deal with challenges, so perhaps it’s time we did so again. The new normal might not look much like the housing market we all recognise, but maybe this presents us with an opportunity to do things in a greener, leaner and more efficient way? 

What will the Conveyancing Industry Look Like Post-coronavirus?

If your COVID-19 experience has been anything like ours, you’ll have spent the last few weeks self-isolating and trying to complete what work you can – easier said than done when many land charges departments are closed and most transactions have stalled. So it’s the perfect time to take stock and think about what the future of conveyancing might look like.

In the short term, how long are the UK’s partial lockdown and the current restrictions on the property industry likely to last? And, in the longer term, how will the industry adapt to what could be the worst recession in a century and a world in which remote working looks set to become the norm?

The Short-term

First, let’s look at the short term.

The obvious place to start is the lockdown and when it’s likely to end. But, before we go any further, we need to add a caveat. The COVID-19 crisis is a live event and continues to change hour by hour, confounding even the world’s top scientists, so anything we say could be out of date within a few hours or days.

Nevertheless, there will no doubt be some in the UK looking hopefully towards Denmark and Austria who have both announced a cautious easing of restrictions beginning in the week after Easter. Could we soon see something similar in the UK?

Well, it depends where you look. The scientific consensus seems to be that social restrictions will stay in place for at least four weeks following the virus’s peak in the UK. Some, such as Dr Jenny Harries, Deputy Chief Medical Officer for England, think cases peaked over the Easter weekend and will now begin to fall if the public follows social-distancing measures.

Meanwhile, Chief Scientific Advisor Sir Patrick Vallance has said deaths in the UK will continue to rise for a further fortnight after Easter. Some scientists have even suggested the peak could come as late as mid-June.

The problem is we just don’t know. The UK is woefully behind in its testing capabilities.
Although No.10 has repeatedly claimed it’s on course for its 100,000 tests per day target, the reality is that even now when tests are being scaled up, the actual number of tests carried out has never risen much above a fifth of that figure. Compare this to Germany, confirmed as carrying out around 50,000 tests per day since the beginning of the crisis (although it should be noted Britain isn’t alone in its poor testing performance, France and Spain also lag behind).

Nor is the UK at all comparable with Denmark or Austria. Both of these countries moved to adopt stringent social distancing measures such as shutting schools and businesses early in the crisis and, as a result, have confirmed cases in the low thousands at the time of writing. Locking down early and keeping social interactions to a minimum during the early stages of virus transmission has allowed both countries to come out of the containment phase earlier.

For the UK, it seems certain it’ll be at least another four to six weeks before we see any easing of social restrictions, with the most optimistic predictions placing an end to the current lockdown in mid-May. This means we’ll see virtually no new transactions for at least another month and slow movement on those still outstanding, as land charges departments, law firms, surveyors and estate agents remain unable to work or confined to what they can achieve from home.

So it’s perhaps no surprise UK house sales are expected to drop to their lowest level in 20 years. But while that might sound grim, it should be taken with a pinch of salt. Economic stasis means that the plan, or what seems to be the plan, to temporarily ‘freeze’ the economy by furloughing large sections of the workforce and suspending business is working.

The Long Term

What about the longer term?

Well, the first thing to note is that COVID-19 is likely to change the way we work forever. Many conveyancing businesses and local authorities will have been forced to embrace remote working. Those that have are likely to find employees questioning why they need to return to the office at all once the crisis is over.

At the same time, some of them are going to find that running a business remotely is not only possible but perhaps even preferable, to the current approach. If economic predictions are correct, then many businesses and local authorities are going to come out of this crisis in financial straits and looking to save costs. And, if you’ve spent much of the last quarter working remotely with few problems, the most logical OPEX cost to cut is office space. This will be particularly relevant to local land charges departments, who could face a fresh round of government-mandated austerity.

The outcome of this is a hypothetical future in which much of conveyancing is done remotely. We’ve already seen the beginnings of this with the Land Registry’s much-opposed takeover and centralisation of LLC1 data. But could we see a future where all local land charges data is supplied from an online, centralised source? Or perhaps land charges staff will work from home and retrieve the data needed via an online database?

Furthermore, do solicitors need to be in the office to process documentation? Do estate agents really need a high street base to work from? When you couple the fallout from COVID-19 with the problems presented by climate change and the fact the planet needs less of us to commute using cars, trains and buses, the answer is likely to be no.

It’s clear COVID-19 could be the catalyst for a change in the way our industry works, but what about its long-term health?

It’s obvious the industry faces a difficult year, things were beginning to look up with the housing market finally returning to pre-2008 levels, but we’re now potentially back at square one. How well conveyancing businesses deal with this will largely depend on two things: one, how well run or overleveraged and indebted they were pre-coronavirus, and two, what the government does to keep the industry afloat.

Schemes like providing 80% of wages to furloughed staff and the offer of business loans at competitive rates are welcome but the industry will need more. In particular, those firms in poor financial health going into the crisis – quite a few, given the slow recovery from the last crash – will need direct financial assistance rather than loans if we’re to keep thousands of jobs from disappearing.
However, it’s not all bad. We may see a slight decline in prices spurring those who were on the fence into the market, particularly the young. What’s more, there’s nothing like spending two months’ trapped indoors to help you decide you really do need a bigger home or more green space.
So the industry should rebound. However, the speed at which it happens and what it looks like is entirely dependent on whether the government succeeds in preventing a temporary shock turning into an economic tailspin.
Over to you, Mr Johnson.