COVID-19 and Residential Conveyancing

On March 26, the Coronavirus Act and the 2020 Health Protection Regulations was passed into law by parliament.

The Act contains strict new measures to stem the spread of coronavirus, including limiting people on how often they can leave their home. People are only permitted outside on four conditions; to shop for basic necessities, one form of exercise a day, any medical need or travelling for work purposes. While the new laws aim to ease the burden on frontline staff and maintain social distancing, they will inevitably impact on an already difficult market of residential conveyancing. Here, we will answer key questions on how Brabners Residential Property team are responding to the extraordinary situation and how the market has been affected.

How are transactions proceeding?

Despite the Act intending to reduce people’s movement and slow the spread of the virus, many residential transactions can still be completed. The government has issued guidelines on when deals should be completed in the current climate.

They state:

• There is no need to pull out of transactions, particularly where the contracts have already been exchanged.
• If the property is vacant then the purchase can proceed to completion, provided rules on social distancing are followed.
• The seller and the buyer should work together to agree the move or agree to defer a date, particularly where someone has symptoms or is self-isolating.

Brabners remains very busy and a number of completions are still taking place. Completion of exchanged matters, transactions where the properties are empty, purchases by investors where the tenants are not moving out, or where the properties are empty are all continuing as normal.

We are also continuing to undertake many transfers of equity transactions where no one is physically moving. In these instances, we are facilitating family arrangements to add or remove a person or persons from the property ownership registers.

There are also some transactions that we can bring to near completion in readiness to finalise when the lockdown is over. So, if you are considering moving home or have found the property and finances are in place, then we can assist in dealing with the paperwork. With our help you are in the best possible position to secure the property and move when the restrictions no longer stop you.

How has the market been affected?

As part of the new laws around social distancing, potential buyers are unable to view a property in person. This has had a major impact on estate agents.

However, a number of sales and purchases are still being agreed where properties have been previously viewed. Online auction sales continue to take place with Brabners instructed on one such sale last week. Nevertheless, there are limits to such online transactions. With many people postponing their house move during this uncertain time, the impact on estate agents, particularly those on high street, could be devastating.

The market has been dealt a further blow by mortgage lenders beginning to withdraw offers issued to customers, including high loan to value offers. Nationwide have withdrawn all loans with loan to value above 75% and Virgin has stopped all new mortgages on purchases. These were usually available to first-time buyers who may now find themselves eliminated from the market. Nevertheless there are many lenders that continue to offer good deals and follow on existing offers issued prior to the lockdown.  

We have seen a number of transactions understandably withdrawn due to Covid-19. However, the majority have been put on hold for 3-4 weeks in anticipation of restrictions being relaxed.

Can we continue?

Absolutely.

As of this moment and for the near future that answer is yes. A number of transactions that do not require the movement of people, or where this can be done following social distancing guidelines, are still proceeding. This includes any transfers, purchases of freeholds, empty properties, investment properties with existing tenants, and charges.

At Brabners, we are used to agile working and have seamlessly switched to working from home. We are using secure online connections which allow us to conduct business by email and phone. Robust systems and processes are in place to ensure we continue to follow internal procedures and are able to make a positive difference to our clients.

We have many clients who wish to proceed so, once the pandemic ends, their acquisitions will be ready for them and business can continue. Some clients, who are looking to move properties, are wanting to exchange contracts and set a completion date in 2-3 months or earlier by agreement. This is, of course, also possible. A completion date can be flexible, if required, and most firms are agreeable to flexibility in agreeing terms on this kind of matter. For any other matters who cannot proceed towards completion, we are looking to bring the transaction up to exchange, and halting the transaction there, if the clients wish.

What will be the long-term outcome for us?

It is expected that the number of transactions will reduce, if the restrictions on movement continues. Nevertheless, we continue to proceed with any transactions and matters our clients wish to proceed with and that we can facilitate. We will also continue to support our clients during this difficult time and provide any advice we can. There is a dedicated covid-19 page on our website which contains advice on many subjects.