The 2nd instalment of our weekly information panel for Property Developers. You can read last week’s briefing here.
Hosts of this 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
We are here to provide you with information and to help you, so please do contact us if you have any queries.
Weekly News – 04/05/20
Charlotte Moxon – Strutt & Parker
This week has remained one of great uncertainty, however an air of positivity is definitely creeping in. We are awaiting the Government guidelines as to how they will lead the Country out of lockdown, and I am sure we will all face changes to our businesses we could never have prepared for prior to this period. We are seeing, within our own business and others, a period of great adaptation, and with that, fantastic idea are born. Our teams continue to surprise me with their work ethos, productivity and enthusiasm to the industry we all know and love. The keenness to return with a stronger business and stronger relationships with our clients has never been more apparent.
The week has also shown some positive online statistics with views to our online virtual viewings increasing by 27% in April compared to March, a sure sign that buyers are becoming more active and thinking about how their property plans will evolve over the remainder of 2020 and into 2021. We continue to with applicants to line up possible viewings for them when we are in a position to safely do so.
Our #didyouknow campaign continues on social media, with an insight into weird and wonderful facts from around the country – please do take a look and discover something new about our wonderful Country. As we look forward to the bank holiday on Friday and over the weekend in honour of VE Day, I hope we have an opportunity to reflect on the importance of the simple things in life, the sacrifices others have made for the lives we now have and how lucky we remain in the face of what has been a difficult time for most of us.
Matt Wilde – SPF Private Client Finance
Lenders are continuing to look at ways to adapt and innovate and we have seen a number more of the mainstream lenders reintroduce higher loan to value products in the past week. Barclays have increased their maximum loan to value to 80% and Halifax & Nationwide up to 85%.
Birmingham Midshires also relaunched their purchase range up to 60% having recently only offering re-mortgage products which is great news for investors.
Last week also saw the number of available mortgage products in the market increase for the second week in a row, these were mainly in the re-mortgage sector but also for purchases and buy to let’s. This gives purchasers much more choice to see what options they have whilst they carry out ‘virtual’ viewings but also for borrowers with an existing mortgage whose current rate is coming to an end.
Overall another positive week with an increased number of mortgage products to choose from but also for clients with a smaller deposit.
Liz Hailey – Bonnetts Solicitors
This week is one of great expectation. We all eagerly await details from Boris of the Government’s roadmap us to guide us out of the lockdown. However, we already know enough about this crisis to know that it is unlikely business will be able to reopen quickly or without significant change to standard practices. Social distancing will require new ways of working, management of premises for offices, workplace rules, changes to retail, leisure industry and so on. It will not be a question of “business as usual”.
Even when the lockdown is eased enough to gradually enable activity to increase, cash flow will still be an issue for many businesses for a considerable period – we all know that many profitable businesses can fail for lack of cash. We cannot expect the tap to simply turn back on once the lockdown ends when many businesses and industries will be in a significantly weakened state. Coupled with increased anxiety of individuals over job security and health, this is likely to take time to settle.
The short-term outlook for the housing market is highly uncertain but surveys range from predictions of a sharp recovery to a complete collapse for the remainder of 2020 and into 2021. Such extreme variants in the data and research reflect how different this current crisis is to previous downturns.
Of course, the property market will have a vital role to play in the wider economic recovery. Many of the leading agents and Rightmove have made statements making it clear that some form of stimulus should be offered by the Government to facilitate a quicker recovery. Direct reference has been made to a stamp duty (SDLT) holiday, an extension of Help to Buy and some form of incentive for lenders to keep offering favourable mortgage terms to help both the new build and second-hand sectors.
A temporary suspension of the 3% higher rate SDLT charge for additional properties seems to be the suggestion gaining the most momentum. The RICS and the NFB have both called for this to be applied. It would stimulate the buy to let industry which in turn would assist with the expected increase in demand for rental properties caused by the continued disruption of COVID19. Landlords are of crucial importance to the new build market assisting with sales and therefore finance. In practice, any incentive, even if directly impacting only one class of buyer, is likely to have the impact of increasing activity in the wider property market.
SDLT liability and the push for reform is never off the agenda for long. Whether the Government offer an SDLT stimulus remains to be seen and we will not be holding our breath. Regardless of any change that might lie ahead, it is worth making the point that we assist developers (and indeed all those buying property) in ensuring that they are making the most of the legislation that currently exists. Many of our clients are unaware of the reliefs that their acquisition may qualify for and indeed some have even already overpaid SDLT (and we have assisted in successful reclaims). We offer advice on several legitimate ways to reduce SDLT and to apply reliefs many advisors overlook or do not fully appreciate. Your SDLT bill can be significantly reduced if you are eligible for reliefs such as Multiple Dwellings Relief (MDR), Mixed-Use or non-residential rates for uninhabited properties. It is essential to identify these opportunities with careful assessment and advice. Look out for next week’s update when we will explore SDLT in more detail with specific information in respect of the reliefs and potential avenues available to reduce your SDLT bill (in line with current legislation).