Covid-19 Presses Pause on London’s Prime Residential Property Market Recovery
It is clear that we have entered uncharted territory in recent weeks as property markets attempt to deal with the barrage of challenges emerging from the Covid-19 pandemic.
There is no doubt that the residential property market had been in good shape following December’s general election result. Demand strengthened and according to Knight Frank as recently as 14 March, the number of new prospective buyers registering in London was 16% higher than the same period last year. In March 2019, the country’s biggest concern was the impending Brexit deadline. It is now clear however that we have entered uncharted territory, as the property market attempts to deal with the challenges emerging from the Covid-19 pandemic.
On Monday, March 23, Prime Minister Boris Johnson announced that the U.K. would be locked down to combat the spread of Covid-19.
““From this evening, I must give the British people a very simple instruction—you must stay at home,” ”
Amid legal uncertainty, reductions in mortgage lending and public health concerns, the residential property market has taken a pause.
Prospective sellers who have not yet received an offer on their home were advised to stay put until the lockdown was lifted and were told to use this time to prepare as much as possible to sell once restrictions lift. The Ministry for Housing, Communities and Local Government advised buyers with a scheduled move to delay for as long as the stay-at-home measures to tackle Covid-19 are in place, even if they have already exchanged contracts.
Housing Secretary Robert Jenrick said “parties should show pragmatism” to delay a move, especially if any members of the chain are isolating or being shielded - but he allowed that if moving is unavoidable, advice on social distancing must be followed throughout.
The official guidance is set out below:
Home buyers and renters should, as far as possible, delay moving to a new house while emergency measures are in place to fight coronavirus.
If moving is unavoidable for contractual reasons and the parties are unable to reach an agreement to delay, people must follow advice on social distancing to minimise the spread of the virus.
Anyone with symptoms, self-isolating or shielding from the virus, should follow medical advice and not move house for the time being.
Where moves do need to go ahead, all those involved should take care to follow government guidance on social distancing and hygiene.
Further many lenders have limited new lending to 60 per cent of the purchase price (requiring a 40 per cent deposit) while some have temporarily suspended all new mortgage applications.
In-person viewings have also been banned in favour of virtual video tours, with estate agents, surveyors and lenders instructed not to enter properties for viewings, valuations or appraisals.
The full official Government guidance for agents, conveyancers and the public is below and at www.gov.uk.