Mark Snape is managing director of Broker Conveyancing
By the time you read this, it’s likely that the three-week extension of the lockdown will be over and – judging by the mood music currently being played in Westminster – we will be embarking upon a further extension taking us to the end of May.
Even if lockdown has started to be lifted, the best-case scenario is that this will be phased, and that when it comes to a return to work, each sector will be treated on its own merits.
Whether that extends to the property market is still up for debate, although I’m acutely aware that many are lobbying for the sector to be one of the first to open up.
That is perfectly understandable, given the importance of the housing market to the overall UK economy, and indeed the confidence that it can provide to the wider general public.
For better or worse, housing is often seen as a benchmark for the performance of the economy. Were we to ‘open the doors’ to future activity, it would likely give a significant boost, not just to market participants but right across society.
Again, rightly or wrongly, house price levels are often taken as a barometer of where we are in any economic phase; to that end, there seems little doubt that we’ll see prices decrease in the short-term.
Just what level of fall prices will take is up for debate; it will depend on how quickly we can get the sector up and running again once the lockdown is easied, and what sort of rebound or pent-up demand can be unleashed at that point. Even so, we must all prepare ourselves for some spectacular lows and highs during 2020, which is likely to look like no other year in living memory in that regard.
Take, for instance, the potential impact the virus may have on transaction and activity levels.
Recent research from Knight Frank suggests that during 2020 this could mean the loss of 526,000 home sales, and 350,000 fewer mortgages, compared to what might have been achievable in any ‘normal’ year.
Knight Frank has also predicated these results based on the lockdown being partially lifted from June, so you can imagine what the further impact might be if this is not in fact the case.
Indeed, we must factor in the possibility of different phases of lockdown, not just the one we’re currently in.
Should the virus levels begin to spike again, say in October or towards the end of the year, then the government has already signalled that it would be willing to repeat these measures.
This, of course, leaves the housing market in a difficult situation. While we must all applaud those lenders that have been willing to accept desktop or automated valuations during the current conditions, there is still a huge raft of housing market business that cannot be progressed without a physical valuation.
The great unanswered question is, what happens when lockdown ends? If those Knight Frank numbers are anywhere near correct then all housing market stakeholders will feel it severely.
As you’ll be well aware, this is not simply a case of transactions and mortgages falling through and impacting on consumers. What about the estate agent, mortgage adviser, lender, conveyancer, surveyor, distributor, panel manager, and packager? The list goes on.
The livelihoods of so many businesses and individuals are tied up with a fully-functioning housing and mortgage market. This perhaps makes the case for an early reopening of this sector even more compelling.
From the perspective of a government currently paying out huge sums of money, it would certainly be preferable to be able to recoup some of the many billions in taxation it gets from property sales.
Don’t get me wrong, many industries and sectors across the UK economy have been hit much harder than us by this shutdown, but in terms of the ability to put a metaphorical smile on the face of our economic progress, getting back to some sort of property market normality would surely be a key ambition for any government. At least, you would like to hope so.
In the meantime, we are fortunate in that certain types of business can continue to go ahead, and that the industry has come together in terms of its use of technology in order to make this happen.
Consumers seem to want to progress their cases, whether purchase or remortgage, and where possible, lenders are facilitating that, again utilising solutions where they can, and trying to get to completion wherever it is possible.
It remains a very difficult time, particularly for advisers, but as usual the message is all about making the most of the opportunities that do exist. This means maximising ancillary sales and, where it’s not possible to progress cases, getting them into a position where they can move forward as and when the conditions finally allow.
We are seeing the resilience of the advisory community in spades at the moment.
Keep digging in and answering all your clients’ needs, and we will continue to work together to get to that light at the end of the tunnel.