Updated on 29/04/2020
This time of uncertainty appears to have affected almost everything – our social lives and who we see, where we travel, where we eat and for many people how and where they work. The residential property market won't go unaffected either. We'll look, briefly, at what’s currently happening and what you can do to protect yourself.
What is currently going on?
Currently the market has slowed, which is unsurprising with the combination of reduced ability to view properties, financial insecurities, and surveyors’ inabilities to inspect.
However, not all property transactions need surveys and we're finding that the market is still moving. There's plenty that can be done while we wait for normality to resume, including transactions such as:
- Transfers of equity e.g. between family members
- Sales/purchases where the LTV ratio is less than 60%
- Sales/purchases of vacant properties
- Cash purchases.
Savills Research has predicted a likely build-up of latent demand to move after people have been unable to leave their homes during lockdown. They also predict that people will discover a need and desire for more living space if they do decide to move.
The relatively low levels of price growth in the lead up to the lockdown and historically low interest rates will also play a part. Combined, these factors “should support a return to stronger levels of price growth in the medium term”, although vendors will need to remain pragmatic on pricing.
What can do you in the meantime?
Perhaps you're thinking you will want to sell - what can you do?
- Speak to estate agents, such as Savills, who can carry out virtual property valuations
- Organise your paperwork such as planning documents, building regulations certificate, gas and electrical certificates - you'll need these at the very outset of your transaction so get them ready if you want to sell fast.
- Ask your solicitor to check your legal title in order to resolve any potential issues that a future buyer may identify and could delay the sale.
Perhaps you don’t want to sell, but want to use this time to get your financial affairs in order. Now is the perfect time to take stock and consider how you can protect yourself and your family members. So, what can you do?
- Make a Will - read more about making a Will during the coronavirus lockdown
- Prepare a cohabitation agreement, or a pre/post-nuptial agreement - these agreements can regulate how you own a new property with a spouse or partner and, importantly, how you would split any equity if your relationship fails.
- Prepare Declarations of Trust - If you co-own a house with others, this will help you set out how ownership works and what happens if someone dies. Read more about Declarations of Trust
This uncertain period will pass, and we hope that everyone and all markets will emerge stronger and better protected for the future.
It's often the case that people (solicitors included!) think that “it’ll never happen to me”, but that isn't the case. We've all been affected by COVID-19 and how we respond to it now will affect how strongly we come out the other side.
Protecting your assets isn’t a cynical move, but a proactive and sensible step to make sure you and your loved ones have the clarity and security to face your financial future.
See our Conveyancing & Property section for more information about how our solicitors can help with a range of issues during this period.
By Residential property associate Anoushka Parker and family law senior associate Jenna Lucas in association with Savills