Robert Jenrick urges businesses to ‘prepare to restart’

The coronavirus pandemic has brought the market to a near-standstill and it is feared house prices will slump in the months ahead. People have been urged to delay house moves to slow the spread of Covid-19 but Mr Jenrick confirmed he is investigating how he can give the industry the green light. Mr Jenrick said: “The current restrictions, while necessary and important, have been difficult, with some families feeling stuck in homes no longer suitable for them. We do not want these measures to continue any longer than they need to.

“That’s why I’m looking to ease restrictions on moving home as soon as it is safe to do so, guided by scientific and medical advice.”

The property industry is pushing for a stamp duty holiday and help to encourage people to move home.

Estate agents are calling for cash loan of £1,500 for home-buyers and a six month holiday on property taxes.

Work is also underway behind the scenes to agree a new protocol so prospective buyers can safely visit properties in the coming months.

Measures under consideration would require people to spend no longer than 15 minutes in a property. They would not be allowed to bring children with them or be in the same room as the seller, and some form of protective clothing may have to worn.

It is hoped that people who are desperate to move will soon get the chance to complete sales.

Mark Hayward of the National Association of Estate Agents said: “We know that there is a huge amount of property that is in the pipeline that is in lawyers’ hands… That bulk will need to be moved through.”

However, he expects that “transactions are going to be down significantly this year, probably 25 percent”.

Rupert Melville-Ross, a partner with Taylor Vinters solicitors, backs a stamp duty holiday, arguing that it “would have a beneficial psychological effect”.

Stamp duty, he said, is “seen as an expensive burden that people struggle to afford and often stops them from making a purchase”.

But buying agent Henry Pryor argues a stamp duty holiday will have little effect on the market and would be seen as the Prime Minister doing “a favour for his rich chums”.

First time-buyers do not have to pay stamp duty on the first £300,000, and in England the rest of the population benefits from a £125,000 threshold for residential properties.

He said: “Sellers need to realise that the game has changed. Don’t listen to estate agents who are going to tell you it’s business as usual.

“This is the biggest global shake-up since World War II… And if it doesn’t have an impact on the housing market I’m a Dutchman…

“If you don’t recognise there’s been a change, you’re a blithering idiot.”

The key problem facing the industry, Mr Pryor claims, is a lack of stability and confidence, with lenders now unsure of the true value of properties.

He said: “It’s like you asking me what the price is of moondust today. There isn’t a functioning market so we can’t tell you.”

People are also reluctant to commit to buying homes under construction because of the uncertainty caused by the pandemic.

He said: “What happens if you get to November and either it’s not finished or it’s only worth half what you paid for it? Why would you take the risk?”

Looking ahead, he said: “The first published indices will show house prices down in July by about five or 10 percent. The supply of properties will be generated by the three Ds – death, debt and divorce, all of which I’m sorry to say will be higher as a result of our current experience.

“[There] will be people who probably have to sell or have a much stronger motivation to sell than any buyer would have to buy. That in turn will push prices down.

“Then there will be a number of bright people who in October will probably work out that whilst they can’t sell their house for as much as they would have got in January, the house they want to buy is corresponding cheaper and therefore [they] might as well crack on and they will do. By and large, most buyers won’t be sufficiently confident to participate until the new year.”

He predicted a “miserable” final quarter “as lots of people work out that personally and as a country we are much, much worse off than we were when we started 2020, and that in turn inevitably is going to bear down on the housing market”.

However, he was sceptical about the housing market needing government intervention.

He said: If you’re in the restaurant business, what we’re going through is chickenfeed… The housing market is going to be challenged, as are many other businesses, but it has a history of bouncing back which gives me reason to be optimistic.

“I think the Government haven’t got it all right but I think by and large they have done as good a job as anyone would have done under the circumstances.”

Source: Read Full Article