We are honoured to have been asked to partner with Strutt & Parker for a weekly briefing note aimed at Property Developers. Each week we will be joining Strutt & Parker to provide valuable property market information and updates to you at this time, alongside the prestigious businesses of Alexander James Interior Design and SPF Private Client Finance.
Hosts of the weekly panel include:-
- Liz Hailey – Director, Bonnetts Solicitors
- Charlotte Moxon – Head of Regional New Homes, Strutt & Parker
- Matt Wilde – Head of New Homes – SPF Private Client Finance
- Ben Axton – Show Homes Sales Director, Alexander James Interiors
We are here to provide you with information and to help you, so please do contact us if you have any queries.
Weekly News – 27/04/20
Charlotte Moxon – Strutt & Parker
As we head into our sixth week of lockdown, we have seen a huge growth in online activity through our Strutt & Parker website, portals, virtual viewings and our new virtual valuation tool (for second hand property vendors), our interaction with new clients and buyers continues to excel. We are busy across the company booking viewings for when we return, and await the news eagerly. I have heard that Jersey will be relaxing their lockdown over the next few days, and estate agents will be amongst the first to return. As and when that day comes for us, we are ready and enthusiastic to hit the ground running.
Members of our team continue to lobby for changes to stamp duty on our return to assist with the reinvigoration of the property market, and this has been well received thus far. We will keep you updated if and when changes are made, and explain how this will affect you and your business.
Over the next few weeks, we will continue our online resources for clients including the launch of the New Homes offices online, the launch of the client portal and client webinars. We are here to help all of our clients during this period, and please do not hesitate to contact me if you have questions or a topic you would like to find out more on.
Matt Wilde – SPF Private Client Finance
After a flurry of lender withdrawals, products pulls and reprices, there was a period of stabilisation last week and with lenders awash with liquidity and a willingness to lend, we are now seeing some loosening of the strict measures put in place at the start of this current situation.
The lenders in the mortgage market initially focused on service related matters, the logistics of their staff and the new challenges that it uncovered. One of our lenders went from receiving around 100 calls per year regarding payment holidays to 1600 per DAY, so as you can imagine, all resource was placed to deal with their existing customers trying to cope with the changes.
What we are now seeing:
- Our lenders are now focusing on new business and helping clients, lending to those who are perhaps currently furloughed and helping borrowers to remortgage onto better rates.
- Borrowers looking to purchase also now have more options on the table, with lenders now resuming their normal loan to value limits instead of the restricted 75%.
- More mortgage valuations are being carried out remotely, referred to as ‘desktop valuations’ or AVM’s. See our CEO, Mark Harris commenting on this here.
Liz Hailey – Bonnetts Solicitors
As we begin week 6 of lockdown, we remain surrounded by uncertainty but we also see signs of some businesses beginning to emerge from lockdown. Multiple housebuilders have recently announced the reopening of construction sites; Persimmon, Taylor Wimpey, Vistry, Lovell Partnerships to name but a few. We know that many of our developer clients are still building (though supply of materials was an early challenge). Of course, these were never formally forced to closed and, if appropriate health and safety measures can be adopted, the Government have made it clear from day one that continued activity in the construction industry is vital. However, we were reminded by Boris this morning of the need to “contain our impatience” and that the second phase will see the government gradually “one by one fire up the engines of this vast UK economy”. There is no question we are being prepared for a long road to recovery with “difficult judgements” to be made.
Developers are facing profound challenges arising from the delay and disruption caused by the lockdown. The country desperately needs new homes and fortunately demand still exceeds supply. Interventions will be needed to ensure that developers can survive the dramatic impact of growing financial pressures, labour shortages, practical issues surrounding the adaptation of working practices to comply with the 2 metre social distancing requirements and the ripple effect of supply chain issues.
Our own business, like many of yours, is experiencing widespread change and every business will need to devise not only an exit plan for lockdown but new strategies for the future. What is evident from the last 5 weeks however, is how quickly we can all adapt and there has already been a huge shift in how people behave The legal profession has not been renowned for being the quickest to embrace change but the rapid response of the Law Society with its guidance on Covid-19, the escalation of the use of technology to support a remote workforce, the progress being made in the provision of digital signatures, where the Law Commission have now published their report setting out a detailed analysis of the law relating to the formalities around the electronic execution of documents. are all signs that the digital transformation will be one we must embrace along with an acceptance that will not, and should not, revert to our old ways of working. We at Bonnetts managed to keep any disruption caused by the physical closure of our offices to a minimum, as we had recently invested heavily in an IT infrastructure upgrade.
As you would expect, we have seen a huge fall in transaction volumes. However, deals are being done. We have seen a significant increase in simultaneous exchange and completions (and, indeed, actively encouraged them, to avoid potential problems occurring between exchange and completion). We are taking new instructions on option agreements, joint venture arrangements and bridging finance as some take advantage of the opportunity to focus on future projects and the reduction in competition while others preserve cash and hold back on new commitments. We are working more closely than ever with our professional partners within agency, mortgage finance and surveying to offer proactive and practical support to our clients.
Charlotte and Matt both touched last week on some of the challenges facing the property market arising from the physical practicalities of conducting viewings, undertaking surveys and valuations and of course the natural cautiousness that will prevail for many individuals for as long as they fear for their job security and their health. As developers resume construction, we hope that planners, local authorities and lenders will give the kind of flexible and practical support that will be vital to ensure that the hiatus in new housing supply is as short lived as possible and that confidence returns to the property market as quickly as possible. With a combination of accessible and flexible mortgage lending, innovative agents such as Strutt & Parker and a proactive and practical professional team such as ourselves, we can ensure we are as prepared as possible for the future beyond lockdown.
There is no question the suspension of the housing market will be far reaching and with the whole economy shrinking it stands to reason there will be a downturn in sales volumes and values. We started the year with a robust property market and while none of us can speculate about what lies ahead, there are many reasons to stay positive. We look forward to discussing developments over the coming weeks and are on the end of the phone or email to answer questions, discuss topics or offer support so please don’t hesitate to get in touch.
Ben Axton – Alexander James Interiors
At AJI, we remain proactive, enthusiastic and have now adjusted to new ways of working during the current pandemic, despite the uncertain times that we now find ourselves in.
Certainly there will be an adverse effect on the new homes sector with some delays in build projects and the supply chain slowing but there seems to be pent up demand and light at the end of the tunnel. Through a vast connection of agents throughout the Home Counties & London we hear of sales being exchanged, virtual tours becoming common place and online activity remaining high.
What does this mean for ‘Show Homes’? We currently have a large number of pending installations ranging from small terrace houses in Kent, family homes in Essex and apartments in Central London. We look forward to installing these projects when the government advises us that it is safe to do so.
We remain optimistic as we continue to operate via video conference calls which give us the ability to continue designing, placing orders and presenting new design schemes to our clients. We feel fortunate to see a steady flow of incoming enquiries with many exciting projects still in the pipeline, proof that there is still activity in the market.
We anticipate that there will be many developers looking to get their projects to market ASAP, so having a range of show home products work well in our favour. A quick ‘Dress To Sell’ package remains a firm favourite with a number of clients, offering flexibility on budget whilst still delivering a turnkey product.
The Private Residential Design team remain incredibly busy with ongoing work and an encouraging level of new enquiries as homeowners use this time to make improvements to existing properties as well as plan for self-build projects.