Monthly Archives: March 2020

Agents Beware: definitive government guidance on buying and selling

Agents Beware: definitive government guidance on buying and selling

The government has at last issued extensive advice on home moving and the activities of estate agents during the continuing Coronavirus crisis.

This came last evening after days of debate on how much marketing, valuing, viewing and conveyancing could be done during the lockdown.

Here is the guidance in full:

There is no need to pull out of transactions, but we all need to ensure we are following guidance to stay at home and away from others at all times, including the specific measures for those who are presenting symptoms, self-isolating or shielding. Prioritising the health of individuals and the public must be the priority.

Where the property being moved into is vacant, then you can continue with this transaction although you should follow the guidance in this document on home removals. Where the property is currently occupied, we encourage all parties to do all they can to amicably agree alternative dates to move, for a time when it is likely that stay-at-home measures against coronavirus (COVID-19) will no longer be in place.

In the new emergency enforcement powers that the police have been given to respond to coronavirus, there is an exemption for critical home moves, in the event that a new date is unable to be agreed.

Recognising parties will need to alter common practice, we have sought to ease this process for all involved by:

  1. Issuing this guidance, developed with Public Health England, to home buyers and those involved in the selling and moving process;
  2. Agreeing with banks that mortgage offers should be extended where delay to completions takes place in order to prioritise safety; and,
  3. Working with Conveyancers to develop a standard legal process for moving completion dates.

Advice to the public

What does this mean for my property move which is scheduled whilst the stay-at-home measures to fight coronavirus (COIVD-19) apply?

  • Home buyers and renters should, where possible, delay moving to a new house while measures are in place to fight coronavirus (COVID-19).
  • Our advice is that if you have already exchanged contracts and the property is currently occupied then all parties should work together to agree a delay or another way to resolve this matter.
  • If moving is unavoidable for contractual reasons and the parties are unable to reach an agreement to delay, people must follow advice on staying away from others to minimise the spread of the virus.
  • In line with Government’s advice, anyone with symptoms, self-isolating or shielding from the virus, should follow medical advice which will mean not moving house for the time being, if at all possible. All parties should prioritise agreeing amicable arrangements to change move dates for individuals in this group, or where someone in a chain is in this group.

What if an extension goes beyond the terms of a mortgage agreement?

UK Finance have today confirmed that, to support customers who have already exchanged contracts for house purchases and set dates for completion, all mortgage lenders are working to find ways to enable customers who have exchanged contracts to extend their mortgage offer for up to three months to enable them to move at a later date.

If a customer’s circumstances change during this three month period or the terms of the house purchase change significantly and continuing with the mortgage would cause house buyers to face financial hardship, lenders will work with customers to help them manage their finances as a matter of urgency.

If your home is not yet on the market

Getting your home onto the market may be more challenging than usual in this period.There should be no visitors to your home. You can speak to Estate Agents over the phone and they will be able to give you general advice about the local property market and handle certain matters remotely but they will not be able to start actively marketing your home in the usual manner.

  • If you are thinking about selling, you can use this time to start gathering together all of the information you will need to provide to potential purchasers.
  • Advice for people to stay at home and away from others means you should not invite unnecessary visitors into your home, including: Property Agents to carry out a market appraisal or take internal photographs prior to marketing your home; and Energy Performance Certificate assessors.

Viewings

If your property is already on the market, you can continue to advertise it as being for sale but you should not allow people in to view your property.

  • There should not be any visitors into your home, and you should therefore not let people visit your property for viewings. Your agent may be able to conduct virtual viewings and you could speak to them about this possibility.

Accepting offers

The buying and selling process can continue during this period but you should be aware that the process is likely to take longer than normal.

  • You are free to continue to accept offers on your property, however the selling process may take longer.
  • Advice for people to stay at home and away from others means you should not invite visitors into your home, including prospective buyers or advisors.

Exchanging contracts

Once you have exchanged contracts, you have entered into a legal agreement to purchase that home.

  • If the property you are purchasing in unoccupied you can continue with the transaction.
  • If the property you are purchasing is currently occupied, we recommend that all parties should work either delay the exchange of contracts until after the period where stay-at-home measures to fight coronavirus (COVID-19) are in place, or include explicit contractual provisions to take account of the risks presented by the virus.

Advice to industry

All businesses must follow the Government’s latest Guidance for employers and businesses on coronavirus (COVID-19).

Estate Agents

Estate Agents should ensure they are able to support clients during this period:

  • Agents should work with their clients and other agents to broker a new date to move where sales are due to complete on occupied properties in the current period where emergency measures are in place to fight coronavirus (COVID-19).
  • Agents should prioritise support for anyone with symptoms, self-isolating or shielding from the virus, and those they are in chain with, to agree a new date.
  • In line with advice for certain businesses to close, agents should not open branches to the public during this period, or visit people’s homes to carry out market appraisals.
  • Agents should ensure that employees can work from home, to support existing clients and advise potential new clients.
  • Agents should continue to progress sales where this can be done whilst following guidance to stay at home and away from others.
  • Agents should advise clients to be patient and not to exchange contracts unless the contracts have explicit terms to manage the timing risks presented by the virus.

Conveyancers

Conveyancers should continue to support the sales process as far as possible and should make sure their clients are aware of the difficulties of completing transactions in this period:

  • Conveyancers should continue to support the sales of unoccupied properties as far as possible.
  • Conveyancers should make every effort to support clients who are due to complete on occupied properties in the stay-at-home period to change this date.
  • Conveyancers should advise their clients who are ready to move not to exchange contracts on an occupied property unless they have made explicit provision for the risks presented by the virus.
  • Conveyancers should prioritise support anyone with symptoms, self-isolating or shielding from the virus and those they are in chain with, and we urge them to do all they can to help a new date to be agreed in these circumstances.

Surveyors

Surveyors should not expect to carry out non-urgent surveys in homes where people are in residence, and no inspections should take place if any person in the property is showing symptoms, self-isolating or being shielded. It may be possible to carry out some of your work online and also carry out urgent surveys on empty properties, or those where the occupants are out of the property or following guidance to stay at home and away from others.

  • Surveyors should follow the latest Government guidance which currently (26 March 2020) states that work carried out in people’s homes can continue, provided the tradesperson is well and has no symptoms of coronavirus (COVID-19).
  • It is important to ensure Government guidelines are followed, including maintaining a 2 metre distance from others, and washing their hands with soap and water often for at least 20 seconds (or using hand sanitiser gel if soap and water is not available).
  • No work should be carried out by a person who has coronavirus (COVID-19) symptoms, however mild.

Removals Firms

There will be people who have already committed to moving home; where possible we are encouraging them to delay their move but a small number of moves may need to go ahead. We would urge everyone to take all sensible precautions to ensure the move can happen safely.

  • Removers should honour their existing commitments where it is clear that the move can be done safely for the client and your own staff and it is clear that the moving date cannot be moved.
  • Removers should follow the latest Government guidance which currently (26 March 2020) states that work carried out in people’s homes can continue, provided the tradesperson is well and has no symptoms or coronavirus (COVID-19).
  • It is important to ensure Government guidelines are followed, including maintaining a 2 metre distance from others, and washing their hands with soap and water often for at least 20 seconds (or using hand sanitiser gel if soap and water is not available).
  • No work should be carried out by a person who has coronavirus (COVID-19) symptoms, however mild.

Vendors can create video tours for agents to market – here’s how…

Vendors can create video tours for agents to market - here’s how…

A video has been launched this morning explaining how agents can get their sellers and landlords to use iPhones to make videos appropriate for marketing.

The ‘How To Do It’ video is 12 minutes long and produced by industry consultant Chris Watkin, and it’s shared below with Estate Agent Today readers.

Chris says: “Have a look at the video and then send it to all your landlords and vendors. Make yourself look pro-active as an agent.

“Please tag every agent you know to ensure they can help their clients too. This isn’t the time for rivalry with competitors – let’s help each other.”

Later this week Chris will be revealing a video series for agents to learn how to edit videos like a pro using inexpensive software and a small amount of hardware.

This may be exactly what the industry needs for the next few months.

Government tells agents to shut offices immediately

Government tells agents to shut offices immediately

Propertymark has been told the agents should shut their offices immediately – they are not “essential businesses” under the new Coronavirus safety guidance.

A statement from Propertymark issued this afternoon says:

“Propertymark has spoken to a senior civil servant at Ministry for Housing, Communities and Local Goverment (MHCLG) this morning. 

“The civil servant stated that agents are not ‘essential businesses’ under the new rules and therefore their view is that agents should close their offices immediately.

“Furthermore, they stated that there should not be any in-person viewings, routine inspections or house moves.

“MHCLG is still looking into property maintenance tasks such as gas safety checks and hopes to issue guidance on these points as soon as possible.

 “In a further development, British Association of Removers (BAR) has issued communications this morning instructing members that moves should only be completed if they are already underway, any move that has not yet started, should not go ahead. 

“Propertymark will keep members up to date later today and as any further information becomes available.”

Barclays refuses to offer buy-to-let borrowers a payment holiday

Barclays refuses to offer buy-to-let borrowers a payment holiday

Landlords who have a buy-to-let mortgage with Barclays will not be offered a repayment holiday, despite government guidance to offer borrowers a payment referral of up to three months as a consequence of the COVID-19 pandemic.

The bank says that the support is primarily available to residential mortgage borrowers, with buy-to-let landlords not considered to be a priority.

A spokesperson for Barclays said: “This is an unprecedented and ever-changing situation, we are constantly reviewing how we best support all of our customers and are working on an appropriate solution and will provide an update later this week.”

Useful guidance and support for dealing with tenants during Covid-19 outbreak

Useful guidance and support for dealing with tenants during Covid-19 outbreak

A high number of buy-to-let landlords are concerned about the impact of the Coronavirus, but The Guild of Letting and Management has provided some practical guidance and advice to help you cope with the existing situation.

One of the most common questions many landlords are currently asking about is the announcement the government made on the 18th March 2020, relating to evictions and support for those renting, although it is important to point out that the new legislation has not yet been released.

A key topic on the Guild’s advice line is Rent. It is important to note, that not every single tenant in the UK has been made redundant, or is experiencing difficulty, therefore, it is important to ensure that this is dealt with on a case by case basis.

Points to consider:

1. Ensure the tenant is aware that rent is still due.

2. If the tenant is experiencing difficulty, guide them to the Department of Work & Pensions website where they can obtain the guidance they require regarding pay, statutory sick pay (SSP) and other relevant up to date information.

3. Ask tenants to put their concerns to you in writing. It is important that you are able to discuss the matter with all the relevant facts to hand.

4. Speak to your lender and find out what they are putting in place. Some landlords have already offered tenants a discount on rent or a “rent holiday”. But remember, that as with the mortgage lenders, this deferred rent will have to be paid back at some point in the future.

5. Speak to the guarantor, where there is one. They should not be left out of any discussions regarding rent payments.

6. Check whether your insurer can offer rent and legal protection.

7. Keep records up to date. Every discussion, conversation over the phone, email, must be logged and documented.

8. Any pre-existing arrears (pre-18th March 2020) cannot be factored into this Coronavirus situation. Remember everyone is in the same boat. No one has experienced this before, This is not the same as the 2008 recession, this is a public health matter, so it is difficult for everyone involved on so many levels.

Coronavirus could cost BTL landlords almost £15bn in lost rental income

Coronavirus could cost BTL landlords almost £15bn in lost rental income

The devastating impact of the Coronavirus could cost buy-to-let landlords nearly £14.9bn should tenants be unable to pay rent during the three month support period announced by the government last week, new research shows.

The government has announced that they will suspend new evictions and halt new possessions proceedings to the court in light of the COVID-19 pandemic.

If tenants are unable to pay their rent, Ome calculates that this would leave landlords £14.9bn out of pocket over a three-month period.

The deposit replacement scheme’s findings are based on the fact that there are 5.2m households currently within the private rental sector alone and without the ability to work and pay their rent, the buy to let sector could see a loss of £4.97bn every month based on the average monthly rent of £955 alone.

Nationally, this lost income is highest in England with potentially £11.6bn lost in rental income, while London is home to the biggest sum regionally with a potential £4.9bn lost in three months alone.

There are some 2.6m landlords operating within the UK buy to let sector meaning the average landlord has a portfolio of two rental properties. With an average rent of £955 and a loss of three months’ rental revenue across both properties, they could be facing an individual £5,730 shortfall in rental income.

With a ratio of 2.1 properties per landlord in Scotland, the loss is at its greatest at £6,146 over three months with Northern Ireland also high at £6,083.

Co-founder of Ome, Matthew Hooker, commented: “It’s great news that the government are providing some financial respite for the nation’s landlords, however, it’s more of a weekend away than a holiday and once expired, UK landlords are still facing the cost of a buy to let mortgage without the rental income to pay it.

“It’s by no means the fault of the tenant if they are unable to pay but there is a very real chance that landlords will turn to the rental deposits at the end of a tenancy in order to recoup this lost rent. While this would be unfair on a tenant who has otherwise kept the property in good order, it may well be the case that landlords are simply left with no choice.

“The silver lining at least is that hopefully, not all tenants will be unable to pay their rent and so this sum of lost rental income should reduce, but whichever way you look at it, the UK rental sector is in for a tough few months.”

Over 600 agents Say No To Rightmove – but will they stick by it?

Over 600 agents Say No To Rightmove - but will they stick by it?

Over 600 agents have now signed up to the Say No To Rightmove campaign including some of the biggest names on the High Street.

Fine & Country, Hunters, Northwood and Belvoir are amongst the company names cited on the Say No To Rightmove website as being signatories: however, the website makes clear these were opposed to the deferred payment plan initially put forward by the portal.

On Friday that plan was pulled and instead a much more appealing 75 per cent reduction was announced for the near future – bringing some support for the measure from critics of Rightmove.

The question for the number one portal is whether critics will continue with their threat of de-listing from Rightmove, seeing the current Coronavirus crisis as an opportunity for the wider industry to reset its marketing priorities.

Meanwhile Zoopla’s more complicated ‘two options’ offer to agents has drawn criticism because of what some see as its opportunistic nature.

The portal is to be free of charge for agents with fewer than 30 branches, which it says comprises 80 per cent of its client base.

This free period will be nine months if an agent leaves Rightmove, and up to five months for free if the agent does not. Both options then require agents to sign to an 18-month contract with Zoopla after the free listing ends, and the portal’s normal fees resume.

On Property Industry Eye one critic wrote of the Zoopla offer: “Is this really the time to use the virus for your own benefit? For me, the Zoopla offer is tasteless – why can’t they just make it free or reduced with no caveats? Maybe they are RM in disguise”.

On Twitter the digital consultancy Propportunities tweeted: “Zoopla’s supporting Zoopla! Is their response to crisis just a misleading opportunistic offer to prise agents off RM and on to long-term contracts?”

And property commentator, agent and PR company chief Russell Quirk tweeted: “Crass from Zoopla. PR rule number one – don’t try to capitalise on a crisis, at least not publicly.”

Industry analyst Anthony Codling summed up the situation by saying on social media: “You couldn’t make this up – Zoopla now offering agents nine months free if they leave Rightmove – as if times weren’t interesting enough. Who will be the first portal to pay estate agents to list?”

It doesn’t have to be like Spicerhaart – another agent’s approach…

It doesn’t have to be like Spicerhaart - another agent’s approach…

While controversy swirls around the approach and motives of the sackings and branch closures at Spicerhaart, other agents are showing how they can pull teams together at difficult moments like these.

Estate Agent Today has seen a message to the staff of Choices Estate Agents from its chairman, Simon Shinerock, revealing an open communications approach and an unusual way of sharing the pain of reduced income, if that happens, during the crisis months.

He says an event such as Coronavirus leads to companies showing their true colours, and that his letter – which we reproduce below, in full – has been met with universal support from his team.

 

 

 

Dear All 

I am writing to you so you can understand my thinking at this difficult and unprecedented time because it falls to me to make crucial decisions over the coming days that will affect the long term survival of the business and everyone who works in it. 

Before I go on I want you to know that compared to our competitors we are a relatively financially strong company, which means that if we are careful we stand a much better chance than most of getting through this crisis and out the other side. 

However, we don’t have unlimited resources and based on what I am now seeing we might not be able to sail through without some drastic temporary measures being put in place. I would also like to say that during the crisis I will not personally be taking anything out of the business and will if necessary make a substantial sum available from my savings in order to get us through.

That said, like any business or family we need to make ends meet and if our income is going to drop substantially over several months we have to plan to reduce our expenses accordingly. 

At the moment we don’t know for sure how badly we will be affected but it’s now obvious new business will be harder and we will take a hit if a significant number of tenants don’t pay their rent. 

Our biggest expense by far is our wages bill, it constitutes over 50% of all our expenses and it is the one over which we have the greatest control. 

In stark terms I have a choice, I can try and get through this by making a lot of people redundant, something I really don’t want to do, or, I can try and keep as many if not all of you employed by asking you to be prepared to potentially make a personal sacrifice during this difficult time.

Normally we expect to make a profit every month, our rental income means we can predict and forecast how we are doing quite accurately and we have been making great progress this year so far. 

I’m happier with my senior management team than at any other time and I can see the quality of all our staff improving all the time. I’m also more confident than I’ve ever been that we as a company are offering a market leading proposition which has become the envy of our competitors. 

So, under normal circumstances I would expect this to be a record year for us. However I can now see that it is most likely that over the coming weeks and months our income is likely to decline and put us in an unsustainable loss making situation unless we put a contingency plan in place now

Obviously the best outcome is that we continue to do new business and take advantage of the many opportunities that will arise as landlords and sellers find it harder to get a result from their agent either because of lack of proactivity, or because some agents will throw in the towel, something we are already beginning to see. 

There will also be a lot of private landlords in distress who may want our help and we should be on the lookout for them. I can still foresee an optimistic outcome where we get through this in profit, now that would be an achievement and it’s something we must aim for and do everything we can to achieve. However, we also need a plan for what we do if we don’t make a profit and can’t sustain our current cost base. 

I want you to know we are exploring all avenues, negotiating discounts and payment holidays with suppliers, looking at government loans and assistance, getting rid of unnecessary expenditure, everything we can to get us through this. 

On the last point please try to help by keeping non essential expenses down to a minimum, every little helps. If after looking at all these options we still can’t cover our costs I am proposing that we apply a fair income reduction formula to everyone in the company.

What I mean is that whatever the percentage shortfall is in a month we apply that percentage to everyone’s pay which would be reduced accordingly. So, as an example, if our normal wages bill is £200,000 and we had a shortfall of £10,000 it would mean everyone would be paid 5% less than normal. 

If we put in this backstop now we may never need it, I hope we don’t but it will mean I can make firm plans for the future, retain as many of our people as possible, focus on the business and come out of this as strong and fit as possible. 

Because of the extraordinary nature of this situation I will be available to any member of staff who wants to speak to me personally to ask questions or tell me about their concerns. All I ask is you speak to your manager first and if you still feel you want to talk to me I’m available. 

I’m delighted to say that since writing this message, during today most of you have been told about its contents and that as a company everyone has received it positively. 

You will be getting an email on Monday from HR confirming the change will be in place, the earliest it can affect your pay is April. I really believe that by pulling together we can come through this intact, stronger and wiser.

Finally, this is new ground for everyone and I don’t claim to have all the answers, I may well make some mistakes and errors of judgement along the way but I promise you this. 

I will do everything in my power to steer us through this crisis and out the other side and I will fully recognise everyone who gives the company and me personally their support and trust along the way

House prices to drop 10% thanks to virus, warns OnTheMarket partner

House prices to drop 10% thanks to virus, warns OnTheMarket partner

A mortgage broker that’s just become a partner of OnTheMarket is warning that house prices are likely to fall 10 per cent over the rest of this year because of the virus crisis.

John Charcol is saying that the peak UK house price for 2020 is likely to be the one recorded in the March Nationwide house price index – already released – or in the price reflected next month by the government.s UK House Price Index.

Thereafter, Charcol’s mortgage technical manager Ray Boulger expects prices to fall 10 per cent by year end, with transactions tumbling in the next three months alone to a figure lower than that recorded at the worst depths of the 2009 credit crunch.

“It is clear activity in the property market will be severely curtailed, not only because of the economic uncertainty dissuading people from moving but also as a result of practical problems of surveyors visiting homes to prepare a mortgage valuation” he says.

However, if any silver lining can be found to the current crisis, it appears that first time buyers may be the beneficiaries eventually.

“Many people who had planned to move home this year will delay their move until conditions stabilise, not least because it will become very difficult to put property chains together” suggests Boulger.

“This will put first time buyers in pole position and so when they decide the time is right to buy, they will be in a very strong negotiating position to secure their first home at a good price, an advantage that will dissipate when the market begins to recover” he continues.

John Charcol has this month announced a partnership with OnTheMarket, meaning portal users will have access to digital tools and guides from the mortgage firm.

Luke Somerset, chief commercial officer at John Charcol, says: “We are delighted to be partnering with OnTheMarket. This latest partnership offers prospective homebuyers access to a leading property portal combined with expert advice when seeking a mortgage. Ultimately this will offer customers an effective and enhanced journey when purchasing a property.”

Agencies set to benefit from massive emergency business schemes

Agencies set to benefit from massive emergency business schemes

The Chancellor of the Exchequer has announced a sweeping range of financial measures to try to minimise the impact of Coronavirus on the economy.

Estate agencies of all sizes are expected to be able to benefit from at least some of the measures announced this evening.

The chief measures are:

Government grants will cover 80 per cent of the salary of retained workers, up to a total of £2,500 a month – that’s above UK median earnings level. The scheme, open to any employer in the country, will cover the cost of wages backdated to March 1 and will be open before the end of April for at least three months. There’s no limit on the funding available for the scheme, and the government says it will pay to support as many jobs as needed;

– The Coronavirus Business Interruption Loan Scheme will not be interest-free, as previously planned, for six months – it will be for 12 months. Those loans will now be available on Monday. british-business-bank.co.uk/ourpartners/co…

– To help businesses keep people in work, the next quarter of VAT payments will be deferred. No business will pay VAT from now to mid June and will have until the end of the financial year to repay those bills. That’s over £30 billion injected into businesses;

– The government is increasing the Universal Credit standard allowance, for the next 12 months, by £1,000 a year; the Working Tax Credit basic element by the same amount. These measures will benefit just over four million households;

– Taken together, this all adds up to over £6 billion of extra support through the welfare system;

– The next self-assessment payments for the self-employed will be deferred until Jan 2021;

And Chancellor Rishi Sunak completed his announcement by saying: “For renters, I’m announcing today nearly £1 billion of support by increasing the generosity of housing benefit and Universal Credit, so that the Local Housing Allowance will cover at least 30 per cent of market rents in your area.”

In addition, Prime Minister Boris Johnson has announced that all pubs, clubs, restaurants, cafes, cinemas, theatres, entertainment centres, gyms and leisure centres will close from this evening for an indefinite period – the UK will be in lockdown.