Physical property valuations resume!
- Published: Thursday 14 May, 2020
- Category: News update
- By: Nicola Eaton
With house moves and viewings resuming from Wednesday 13th May (within social distancing guidelines) and estate agents re-opening, also comes the news that buy to let mortgage valuers are able to resume their work.
David Eaves, Head of Sales at The Mortgage Lender, who offer buy to let, HMO and Multi-Unit Block products commented:
“We have been in contact with our valuation panel manager and we are very positive about the recent announcement. This is great news for landlords whose properties are a little more specialist and therefore not suitable for desktop valuations.
“HMO landlords, in particular, will I’m sure, join us in celebrating this news as they are amongst those who have been most affected by the cessation of physical valuations during lockdown.”
Jamie Pritchard, Head of Sales at Precise Mortgages (part of OneSavings Bank PLC) shares a similarly positive message, particularly for landlords with specialist borrowing needs:
“OSB have supported landlords through brokers with specialist deals, including HMO properties for years and we intend to support these landlords as we come out of COVID-19. As I write this we are waiting on physical valuations to come back to market, and would look to open criteria areas, that we were not accepting new applications on whilst using desktop valuations thereafter in the coming weeks and months.”
Surveyors themselves are starting to give timeframes for when their staff will be back out visiting properties, with one such firm already active as from today.
Simon Jackson, managing director of SDL surveyors, confirmed that his company are amongst those getting straight back to working on mortgage valuations:
“We are very pleased to announce the immediate recommencement of physical inspections and to say that, from today, our surveyors will be visiting properties in order to carry these out in a controlled and safe fashion.
“The nature of the threat from covid-19 means that safety is of paramount importance which is why we’ve put in place a new full inspection procedure that each surveyor will be using on every job.”
Speaking separately on how he will be protecting his staff, Mr Jackson said:
“We are also going to issue all our surveyors with appropriate personal protective equipment in order to carry out their inspections, which will consist of masks, gloves, hand sanitiser, anti-bacterial wipes, a door-opening tool, disposal bags and iPad pen.”
Details of the government announcement
The Ministry of Housing, Communities and Local Government announcement confirmed that:
- House buyers and renters can complete purchases and undertake viewings in person;
- Estate agents offices and show homes can open;
- Removals firms and ‘other essential parts of the sales and letting process’ can restart with immediate effect;
- Builders can return to work, with greater flexibility on site working hours;
- Planning applications will be allowed to be published through social media rather than posters and leaflets;
- Small developers will be allowed to defer payments to councils to assist with cashflow.
It is suggested that this will unstick around 450,000 buyers and sellers impacted by lockdown.
Robert Jenrick, the government’s Housing Secretary, spoke about the new plans:
“Today I am announcing new guidelines to allow the housing market to resume. Our clear plan will enable people to move home safely, covering each aspect of the sales and letting process from viewings to removals.
“Our step by step plan is based on the latest guidance to ensure the safety and protection of everyone involved.
“This critical industry can now safely move forward, and those waiting patiently to move can now do so.”
In the health guidance released alongside this announcement, the government makes clear that the news should not be interpreted as a return to normality.
Social distancing remains essential to prevent the spread of Coronavirus. This still means washing hands frequently and remaining at least 2 metres away from people outside your household.
Property viewings are still encouraged to be undertaken virtually, if this is possible. Open house viewing will not be allowed, only those from the same household (and as minimal a number of people as possible) can attend a physical property viewing.
Those viewing property should avoid touching surfaces and should bring and use their own hand sanitiser.
Anyone occupying a property that is going to be viewed with an agent in attendance, are advised to leave the property whilst the viewing takes place.
A reliance on removals firms to do packing for you, when moving, is advised against – the government asks those moving house to do as much of the packing as possible themselves.
Property searches and surveys
Whilst surveying work can resume, surveyors are not to enter properties where an occupant has symptoms or signs of Coronavirus, or is self-isolating.
When a survey is being conducted, it is expected that only one person from the firm attends, and does so by appointment only. They will also be subject to guidance on working in third party’s homes.
Occupants of a property that is the subject of a survey should allow the surveyor to have full access as necessary to do the work. The occupant should also assist in the process by keeping in another room from the surveyor whilst they work.
Conveyancers are subject to similar measures.
The updated home-moving guidance from the government is available here.
House price opportunity for landlords?
The latest assessment of house prices, from estate agent Knight Frank, predicts a 7% decline outside London and a 5% decline in the capital. Last week’s figure from the Bank of England went further, predicting a 16% decline, as the result of Coronavirus.
However, with fresh news of valuers returning to work, enabling a backlog of held-up property transactions to get back under way, is the window of opportunity narrowing for landlord investors to secure a bargain buy?
How have predictions changed over lockdown?
At the start of April, Knight Franks predictions were calculated from an assumption that lockdown would end by May 31st. At that time they predicted a 3% decline in house prices across the UK, but London prices to remain unchanged.
However, with the prime ministers latest announcement citing July as the earliest possible timeframe within which lockdown would end, the company revised its forecast.
Knight Frank does not expect house prices to fall as sharply as they have done, to date. A representative for the company notes that sellers are less inclined to accept lower offers:
“I think it would be wrong to assume a continuation of the decline we have seen over recent weeks,"
Knight Frank said.
"The key question is will vendors accept discounts of more than 5 per cent? Some will, but there is growing evidence from the widening spread between average offers and the offers that are being accepted that many simply won't.”
What does this mean for landlords?
For those with existing properties and tenancies, there is the time for property prices to readjust.
Many landlords have already transitioned to lower loan to value deals at their previous renewal as the result of the PRA changes to underwriting.
Where this is the case any temporary blip on house prices will not, in the long run, be an issue. Buy to let is and always has been a long term investment strategy.
The potential opportunity lies in the possibility of a buyers’ market, resulting from the uncertainty in the property market.
Securing a property at a good price right now, may help mitigate some of the implications of the loss of mortgage interest tax relief.
Bright future for holiday lets
Many investors assessing the fall-out from Covid-19 are seeing future opportunity in holiday lets.
With everything the country is going through at the moment, the likelihood that a huge number of people will be looking to holiday in UK rather than abroad, for the period following any end to lockdown has to be very strong.
So, whilst holiday lets have been the worst hit through the crisis, their time may yet come, if it is possible to hold out.
Whatever your route, now may be the time to examine investment opportunities.
Rates are low, desktop valuations have become the norm for many lenders and now the return to in-person valuations has begun.
Buy to let is buzzing with activity
In the last week, a smorgasbord of lenders have been reinvigorating their offering to landlords, with the easing of their criteria, returns to the market and updated product announcements.
As recently as this morning yet another lender has launched a range of products offering opportunity to landlord investors.
Barclays, TSB, Paragon, Lendinvest, Bluestone Mortgages and more have all been active in the market with good news for investors on their product ranges.
Jorden Abbs, director of sales at specialist buy to let broker Commercial Trust Limited, commented on the buzz of activity:
“The announcement from the government, that valuers can start visiting properties, is great news for landlord investors. This will unlock more specialist cases, where desktop valuations have not been suitable.
“What is even more encouraging, is that lenders who have also been working through customer service enquiries as the result of Covid-19, are out the other side.
“There is a huge buzz of activity from lenders, which has only been exacerbated by the latest government news for the industry.
“Working so closely with lenders means we are aware of discussions going on behind the scenes too. We look forward to more widening of criteria very soon.”
Overnight reaction to government announcement
Unsurprisingly, the housing industry as a whole has experienced a phenomenal overnight reaction to the government’s easing of restrictions.
Various businesses have shared the initial reaction to the news, demonstrated in sharp jumps in their key performance indicators.
Property platform, Rightmove, reported that visits to its website leapt up 45% yesterday, from the previous day. Email enquiries increased 70% and new listings spiked with 2,115 new properties being added to the platform within 5 hours.
Other sources reported similarly heightened levels of activity.
Estate and lettings agent, Andrews Property Group, received 226 calls with requests for viewings and valuations within one hour of opening its telephone lines.
Group chief executive, David Westgate commented:
“The first hour on Wednesday offered hard evidence of the unprecedented pent-up demand in the property market right now.
“People’s lives have been on hold for the best part of two months and they are now rushing to get their moves back on track.”
Housebuilders have also immediately grasped the chance to get back to work. Persimmon, Redrow, MJ Gleeson and Cairn have all confirmed that their teams will be back to work very shortly.
This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.