The State of the Property Industry as Lockdown Eases: July 2020

Take Advantage of the Opportunities Available

After three months of lockdown, 4^th July, ironically, marked Britain’s very own ‘Independence Day’ of sorts… well, at least in England.

For the vast majority, the past 100 days or so have condemned us to 23 hours a day on house arrest; without the company of loved ones, without the face-to-face interaction shared in the workplace and between friends and, of course, without the ability to enjoy a swift pint at the local.

Freedom is Restored

Whilst the restrictions continue to loosen and our freedom slowly restored, those in the property world eagerly await the next phase of government measures to breathe life into the market.

Up to this point, there have been endeavours to allow the construction industry to begin operating as close to normal as possible, but it’s not been without its short fallings. However, the use of AVMs for valuations and the early lift on the travel ban for house viewings has helped provide some continuation throughout this period.

In addition, construction sites being allowed to remain open under government guidelines, and construction workers being held as key workers, has undeniably helped prevent the stopping of our industry in its tracks entirely.

But AVMs do not work for all types of security and whilst sites remain open and workers on-site, house building has slowed and suffered at the hands of added safety measures and delays of both materials and funding.

House purchases have also been heavily affected by the lack of job security for a number of otherwise would-be purchasers.

Current government schemes have helped to ease this to a degree, we can celebrate the furlough scheme put in place to combat unemployment figures and the rent holidays on residential and commercial mortgages which has, in the short-term at least, helped a number of businesses affected by the pandemic.

However, the furlough scheme is expected to end come October and one would, unfortunately, expect a large number of redundancies when it does finally finish.

The mortgage breaks too are coming to an end and a number of real estate sectors, certainly retail and hospitality, will struggle to adjust to the immediate change in our economic environment and likely close.

Whilst it benefited a vast number of businesses and individuals in the short-term, it essentially delayed the inevitable.

Fear not, for all is not doom and gloom. From my perspective, there are some encouraging noises being made in parliament. The ‘new deal’ and the committed 12bn to house building signifies the intent of the government to support the housing industry over the next several years.

The news that planning reforms will take place will also be music to the ears to developers and property specialist alike – especially considering how they have suffered at the hands of an outdated and unchanged system, which has been in place since 1947.

Thankfully the changes to stamp duty have been implemented immediately. Had the stamp duty threshold been increased to the £500,000 mark, but at a later date, then I expect we would have seen a delay in house purchasing as potential buyers waited to benefit from the increased threshold.

There Are Purchasing Incentives

As it was introduced immediately, we can expect an initial increase in transactions for those purchasing in this bracket. Of course, the reality is this is unlikely to stimulate the property market back to old norms, but it may well give those in a position to purchase the incentive to do so and, as such, be another solid step on our road to recovery.

There are also plenty of opportunities for property professionals to thrive moving into the back half of this year.

The beginning of 2020 saw a spike in inquiries and volumes of transactions, this was cut short by the pandemic and I believe the same demand will return once more normal times present themselves. In the meantime, there are a number of specialist lenders who have continued to support intermediaries and their clients throughout this pandemic period and this shows the immense resilience and potential there is within our industry.

As with the 2008 crash, the specialist finance industry has once again proven its worth and looks to thrive in the years ahead.

Specialist brokers, such as ourselves, have worked closely with developers to manage complex transactions and structure unique lending solutions to deal with clients’ requirements in this testing period.

As a consequence, we head into the back half of this year with great anticipation to take advantage of the opportunities that present themselves to our clients.

Do You Require Property Finance?

If you are not able to wait until the pandemic quietens down further to secure finance and start a project, or you require additional finance to extend a development, we can help.

Get in touch with our specialist property finance brokers today to see how we can help you.