The Gold Rush restarts?

Some big news for the housing market his week. On Wednesday, the statutory instrument listing the “reasonable excuses” to leave your home was amended to allow viewings, site visits, home moves, and any other activity relating to the sale, letting, or purchase of a residential property. You can read the amended Health Protection Regulations here. They were laid before parliament without any debate. Regulation 6 of the original regulations is amended to allow:

“…any of the following activities in connection with the purchase, sale, letting or rental of a residential property: 1 Visiting estate or letting agents, developer sales offices or show home. 2 Viewing residential properties to look for a property to buy or rent. 3 Preparing a residential property to move in. 4 Moving home. 5 Visiting a residential property to undertake any activities required for the rental or sale of that property.”

So both sales and lettings are all systems go, so long as social distancing advice is followed. This presumably includes repossessions and evictions. This raises all sorts of questions about how agents and sellers will organise inspections and viewings. Can you imagine a scenario where multiple viewings are arranged for the sale or rental of a property? Who will clean all the surfaces and ensure that existing residents are protected? What if a current resident is being shielded? How will staff be protected? I can foresee all kinds of problems and disputes. Over the past few weeks there have been constant press reports about the split between the hawks and the doves within the Cabinet. For the hawks, the wider consequences of lockdown are paramount. In this case, it appears that, because the property market is critical to the economy, the hawks have come out on top. Every house move boosts the economy and generates income for the Exchequer. Stamp Duty alone brings in almost £12bn a year. When the market was suspended in March it stopped £82bn of moves and denied income of around £1bn to estate agents. The question will be asked, whether economic health is being put before public health (in reality, I think the two are closely intertwined). Time will tell. But we all know that the property market, particularly the lower reaches of the letting market, is inhabited by some unscrupulous characters whose attention to hygiene, safety, and ethical business might be less than perfect. Perhaps this will be a short-lived change if cases and deaths start rising again. The government’s statement makes it clear that removal companies can also start up again and that the 450,000 buyers and renters who have been stymied since April can move home.

You can expect to see branded estate and letting agents’ cars whizzing around your neighbourhood from today.

The new guidance also allows extended working hours on construction sites and the use of social media to reboot the planning system. The new guidance agreed with the Home Builders Federation will allow flexible working hours on sites so that public transport is not overloaded. You can see the statement from Robert Jenrick here.

One welcome change to the regulations is the relaxation on outdoor exercise. Sunbathing, fishing, and picnics, as well as a range of outdoor sports, are now allowed and there is no limit on outdoor exercise or travelling to exercise. The changes make explicit reference to the importance of these changes for “physical or mental health or emotional wellbeing”. Robert Jenrick’s statement points out that, “The restrictions have impacted everyone, but particularly those without much living space or a garden.” Hear, hear to that. Hopefully this will reduce the degree of vitriol coming from the pitchfork-bearing keyboard warriors who cannot bear to see anyone outdoors looking after their wellbeing.

But returning to the property market, it seems extraordinary to me that you can now have letting agents, estate agents, and potential tenants or buyers poking around your house, and yet your children cannot be visited by their grandparents. You can also have a nanny or cleaner in the house but not non-household friends or relatives. I have stated from the beginning that the crisis has exposed two class-based housing nations, with all the main decisions and commentary coming from those with houses and gardens, while those in flats without access to open space suffer in silence. My esteemed colleague Alison Inman has written about this in Inside Housing, and the need to make sure that homes are made lockdown proof and bearable for the have-nots in future. I would urge everyone to read this.

Meanwhile, it remains to be seen how the market will respond to being set free, or how it will look in future. Some analysts are predicting falls in house prices of up to 20%. All kinds of scenarios are possible. I would imagine that many potential sellers (I am one of them) will delay putting their properties on the market until they see which way the wind is blowing. So there could be a possible mismatch between buyers and sellers that will keep prices up. But potential buyers could also decide to stay put, creating a rough balance between buyers and sellers, albeit at much lower volumes. Given that the market is often pushed by people moving for work, the health of the wider jobs market will also be a critical factor, as will the drop off in foreign buyers as a result of the virus. Whatever happens, the market is likely to be stagnant for some time, with many job losses within the industry and an inevitable spate of mergers and acquisitions as the market contracts. Interesting times.

(This blog was first published by the Housing Quality Network – see here)

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