Post lockdown: Effects on the Property Market.

Post lockdown: Effects on the Property Market, By Tamara Gooding

The Government announced new regulations that lifted the seven weeks freeze on property viewings and home moves. This has understandably left many people with the question – what effect post lockdown will have on the English property market?

Property website Zoopla previously estimated that about 373,000 property sales had been put on hold due to lockdown – with a total value of 82bn. As a result, there are many predictions that the UK property prices will fall dramatically but in comparison many people believe that we may infact see growth in the market. This is due to a combination of pent up demand and freely available mortgages at low rates.

Economists and housing experts are forecasting UK-wide price falls of up to 13%, which are predicted to be due to a number of factors such as; falling incomes and loss of jobs, lack of confidence and a general lack of transactions. In comparison, estate agent Savills has predicted the hit to the market to be more like 5% and a third of valuation surveyors predicting 4% or less.

However, the housing market commentator has said that it is particularly difficult to predict whether house prices will fall and by how much because the nature of the current crisis is different to previous downturns we’ve seen, being caused by global health, rather than economic circumstances.

The 2008 property crash is very much different from our current crisis and this is because the price crash was caused by tough restrictions on borrowing. This combined with higher interest rates meant that there was more negative equity and a greater number of repossessions – subsequently causing house prices to fall.

It is therefore hard to predict what exact effect post lockdown will have on the UK property market as we are in very much uncertain territory.

Whether the current market fall will be 13% or 4% due to the unprecedented times we are currently facing; the result of lockdown will more than likely have a profound effect on both our economy and the UK property market.

It should be mentioned, however, this could be good news for first time buyers and property investors as the post lockdown market is being described as a ‘buyer’s market’. Due to the uncertainty and lack of finances, sellers will be more than willing for a quick sale allowing first time buyers and investors the opportunity to take advantage of reduced sale prices.

At the moment the Bank of England base rate is the lowest it has ever been at 0.1%, so as long as lenders continue lending with low deposits at the current rates, then homeowners are more likely to be able to afford their housing costs and buyers can access money to buy.

If you have any queries regarding a property transaction please get in touch with a member of our Property Department on 01234 350244.

Potential Impacts on Law Firms during COVID-19.

 
Potential Impacts on Law Firms during COVID-19.
By Rosie Crownshaw, Trainee Solicitor 
In these unprecedented times every industry is going to feel the impact of Covid 19- but what effect will this outbreak have on the legal sector? And to what extent?
 
Let us begin with the area of Law I currently work in – the fast-paced world of Conveyancing. A house move alone provides its stresses for any client… now we have to factor in the current climate: that stress has been amplified exponentially.  
The government has directed that moving to a new house is not essential and that law firms should advise their clients against the conveyancing of any properties in order to prevent the spread of the viral disease. With the likes of house viewings, witnessing documents, the physical act of moving to a new house: allowing such to continue promotes bad behaviours during the current pandemic: we need to enforce social distancing and not put people at risk unnecessarily.
Many law firms are ‘old school’- they rely on sending crucial documents by fax, needing physical files present and having a constant access to their tangible archives. Unfortunately, working from home doesn’t come with a built-in fax machine! Majority of conveyancing firms are not paperless and still need access to printers, files and scanners and often have multiple people working on the same files. Communication needs to be key. I think many firms will realize that their workforce is the backbone to their business and, furthermore, that their employees are their best investment.
We are hearing further cases of clients- understandably– having instructed their solicitors to put a hold on their matters as a result of the uncertainty due to Covid 19. This has put many people (those clients wanting to continue with matters) in a blip as they may need the sale proceeds to pay for crucial expenses i.e, debt, care home fees of a parent etc.
I believe that, after the dust settles, there will be a lot of houses on the market as people will want a quick sale as a means to have quick access to funds to cover any deficit that they have occurred during the Isolation period of the virus.
 
Self-isolating can be a testing time for anyone- mentally, physically and emotionally. Especially for a married couple. The combination of boredom, a lack of household chores to and cabin fever causates a more probable ground for arguments. I do sincerely hope majority of them will not escalate but-you never know- one misplaced sock could be the straw that broke the camels back and, with limited access to couples counselling, divorce proceedings could be undertaken for some couples. Also, I pose the question: what does it mean for supervised visits with children and a parent? You’d hope said parent would not risk both themselves and their child for their allocated time, so will the courts give them time in lieu?
 
We are witnessing an unfortunate amount of businesses closing and thus putting jobs and livelihoods at risks- on a positive note, PM Boris Johnson pledged to pay 80% of staff wages out of the Government’s pocket after noticing the effects of thus ‘lockdown’. Despite this, some companies are trying to enforce zero-hour contracts upon their employees – can they do this? Has their contract made provisions or included a force majeure clause? The litigation departments of all law firms will see a rise in business as people want clarification on whether companies have the legal right to end their contract, put them on furlough etc. Which poses a further predicament to Litigators, as although there is a spike in business, it is unlikely that they will be able to take instructions if a client is unable to pay fees due to the economic ramifications of this outbreak. (Unless they offer legal aide).
 
In conclusion, my personal opinion is that law firms are likely to see a dip in work as many clients want to see how we as a country deal with the current pandemic before making any drastic, financial commitments i.e, purchasing a house, divorcing a partner. After the “lock down” period ends work will come in very quickly as the populace has held off. This current period will test the character of any firm- big or small- and prove their dedication on providing the best service to their clients through thick and thin. Like the old saying goes tough times don’t last but tough people do! And as an employee of a firm, that is confident we can pull through this together and continue to grow our business, we will come through this stronger than ever.