News focus: Housing market reboots

Two months after the country went into lockdown, the government wants to reboot the housing market. Homebuyers and sellers had previously been told to delay completion until lockdown ends, leaving 450,000 buyers and renters unable to progress their transaction.

Of course, work did not come to a complete standstill. Conveyancers were told to continue to support the sales process as far as possible and help clients who were due to complete on occupied properties to change the moving date. Peter Ambrose, managing director of London and Guildford firm The Partnership, says that since lockdown his practice has been instructed in roughly 189 matters and exchanged in 157.

Following last week’s announcement by the housing secretary, estate agents can return to their offices. Viewings (virtual or in person) are permitted. Show homes can open. Removal companies and other essential parts of the sales and letting process can restart.

The announcement has been broadly welcomed. Andrew Garvie, joint head of real estate residential at national firm JMW Solicitors, says: ‘To date we have been completing where safe to do so in accordance with government guidelines, so this opens things up. There are certain clients and chains waiting for this green light – so this will be a good catalyst for many and is certain to generate increased pipeline for all property professionals in the industry.’

Many concerns remain, however. Ambrose says: ‘We remain extremely concerned about the ability of law firms to adapt to the working practices required, and that this news will have little impact on our ability to complete transactions in the short- to medium-term.’

There are certain clients and chains waiting for this green light – so this will be a good catalyst for many

Andrew Garvie, JMW Solicitors

Ambrose says some parties refused ‘point blank’ to exchange contracts, while negotiating Covid-19 clauses has sometimes felt like an ‘impossible task’. Some conveyancers working from home did not have access to files or correspondence – which are at their office – so ‘keep asking the same questions over and over again’.

Residential conveyancer Rob Hailstone, CEO of Bold Legal Group, warns that transactions could take longer. The government acknowledges that its revised guidance does not represent a return to normality. And the new plan applies only to England.

Industry guidance produced by the residential sector and professional organisations provides an exhaustive list of steps safely to reopen the market. This states that new instructions, terms of engagement and client letters must be amended to confirm restrictions or information on physical visits. For existing instructions, clients must be notified in writing of any restrictions or changes to the engagement terms.

ID checks should be verified electronically where possible. Contracts may be electronically signed but some documents such as deeds will need a witness physically present. To minimise risk, witnesses should use their own pen and wear gloves. Terms and conditions should be varied to allow for potential Covid-19-related problems.

The guidance is backed by the Law Society. Simon Davis, president, says: ‘Solicitors are ready to help the many whose house moves have stalled – so long as, crucially, it can be done in a way that complies with public health requirements. The industry-wide guidance and subsequent guidance for solicitors will help them to get the market back on its feet safely, securely and as expediently as is possible.’

Hailstone suggests firms work with estate agents, requesting sellers to instruct them upon marketing as opposed to when accepting an offer. ‘An awful lot of time-saving work can be carried out during that usually “legally dead” period,’ he says.

Beth Rudolf, director of delivery at the Conveyancing Association, warns that 50% of estate agents and conveyancers could go bust if transaction times are the same or worse than they were before lockdown.

She says: ‘We know that if home movers instruct their conveyancers on listing and complete their forms and order searches, transaction times can be reduced by as much as 12 weeks and that the risk of a transaction falling through reduces by 50% where the information is available upfront. We now need a consumer message for home movers – complete your forms, instruct your property lawyer, move quicker.’