Jeremy's Blog 15th May 2020: Maintaining the Property Market
This article by Jeremy Moody first appeared in the CAAV e-Briefing of 14th May 2020
The measures now taken in England to ease the Covid-19 restrictions on the property and development are very welcome as a contribution to movement in the economy.
Some construction sites never stopped, others had re-started working and some transactions continued. Nonetheless, developers stalled much work, not risking more money on half-built houses that might not be sold, starving the pipeline for development and further chilling the economy. Intended moves have been frustrated – Zoopla reported that 373,000 house sales were stalled while the Government notes that 300,000 residential tenancies end each month when some will want or need to move.
The steps now taken range from the initial planning process and easing development activity through to enabling most people to move house, with recognition of works to property, its valuation and viewing with the opening of estate agency premises. That is accompanied by an emphasis on social distancing and safety at work and the continuing protection of the shielded and self-isolated.
Renewed work may be done differently with more remote viewing, less speculative action and careful management of visits to occupied property. Even with those constraints, the more motivated can now act more readily and we have lower interest rates than in previous crises. Some have used the lockdown to take decisions, prepare properties for sale or themselves to be able to buy.
Renewed activity will strengthen the sense of the market in all property sectors with fresh comparables supporting valuations and so business and personal decisions and lending. We may begin to discern the ways in which property markets might change – might there be more demand for rural office space for those avoiding commuting but needing offices? How does the housing market change? What happens in the retail sector?
Other measures taken in England that can lift spirits include clearer access to open space and outdoor activity and, again widening commercial activity for a sector for which the spring is crucial, allowing the public to visit garden centres (also in Wales).
These are, though, limited steps in a difficult balancing act for government. Germany’s slightly earlier relaxation shows that we may be on a knife edge for disease control. The arithmetic of the virus’ transmission is understood to mean that small changes can have exponential effects, bringing the risk of renewing some restrictions. We need to be a careful nation as well as a commercial nation.