Moving through lockdown

As with November’s lockdown the forthcoming lockdown which becomes law from midnight tonight will not lockdown the housing market as it did in the first lockdown back in Spring 2020.

The 22 page Government Guidance released last night contains a section on “Moving Home” and clearly states that you can still do so.

Estate and letting agents and removal firms can continue to work.  Due to the nature of their jobs many employed in this sector cannot work full time from home.  Surveyors and valuers would also fall into this category.

If you are looking to move then you can go to property viewings – this covers renting as well as buying.

The Government papers specifically states that people outside your household or support bubble should not help with “facilitating a house move” unless absolutely necessary.

There is national guidance on moving home safely which was last updated on 21^st December 2020:

https://www.gov.uk/guidance/government-advice-on-home-moving-during-the-coronavirus-covid-19-outbreak

Tradespeople who need to work in a home may continue to do so which means that landlords are not absolved from their repairing and statutory health and safety obligations such as gas safe inspections.

Construction workers are specifically mentioned as those who cannot work from home and construction sites can continue to operate so the supply of new housing will not be interrupted.

All of this is subject to firms and individuals observing the Covid-related safety guidance set down by their professional bodies and carrying out social distancing.

The housing market has seen a surge in activity since it was unlocked in May.  The number of movers who would have been affected by a new market lockdown would be very considerably more than those affected back in Spring 2020 if the market experienced a significant slowdown.

What is more likely to be the cause of a slowdown is the end of the Stamp Duty Land Tax (SDLT) holiday at the end of March as new buyers will become increasingly doubtful that they will be able to complete their purchase before 1^st April 2021 and therefore will not benefit from the reduced rates.

The major impact of that slowdown will be experienced in the lower end of the market where prices are below £500,000.  The maximum saving available during the holiday period is £30,000 (£15,000 for purchases of second properties).  The benefit of the saving dwindles in percentage terms the larger the purchase price and therefore the end of the SDLT holiday will become increasingly insignificant the higher up the price bracket that you go.  Prices at all levels of the market will eventually adjust to take into account the loss of the saving.

For overseas buyers the strengthening of GBP following the Brexit deal will make investment here that bit more expensive than in the last couple of months.  Added to that will be the 2% SDLT surcharge for purchases by overseas buyers that comes into effect on 1^st April 2021.

It has been rumoured that HMRC might extend the current SDLT holiday beyond 31^st March 2021.   On the face of it the new lockdown would not be a reason to do so given the absence of restrictions on house moves.  However the cumulative economic aftermath of these lockdowns might be.

We will continue to monitor the situation but in the meantime, if you have any concerns, please contact Rosie McCormick Paice or any member of the Residential Property team.

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