Here we go again second National Lockdown due to start on Thursday 5th of November 2020... remember, remember the 5th of November bit of an irony really that the second national lockdown starts on Guy Fawkes day.
I suspect that Boris Johnson doesn't have enough barrels of gunpowder to obliterate the coronavirus infection rate with a second national lockdown. However, i believe the measures will control the spiralling infection rates and hospital admissions already on the rise as we head into the winter period.
The scientific evidence and data suggests that he is right in calling another national lockdown and one which most of us knew was coming when you consider that we are heading into the winter period and researchers have predicted that covid-19 outbreaks are likely to get worse. We shall just have to wait and see what happens whilst it isn't good news for the overall economic picture, I can at least unravel what it means to the housing market and letting industry as a whole.
There’s one key takeaway for agents from Boris Johnson's announcements on the next England-wide lockdown - the housing market is staying open. Tradespeople are also allowed to enter homes so long as they follow safety guidelines.
Can people still view property?
Yes we are carrying out viewings whilst maintaining our level of service to new and existing landlords. We will remain open ensuring the wellbeing of our people, our clients and customers, whilst continuing to operate in accordance with latest guidance. Moreover if your property is on the market during national lockdown or if it becomes available over the lockdown period we can still carry out viewings and renters will be allowed to move during this period.
However, there will be some short-notice changes on the fringes of agency activity. This includes an extension to the owner occupiers’ and landlords’ mortgage holiday; and an extension of the furlough system. Both are being extended until at least the scheduled end of the latest lockdown, which is December 2.
The Financial Conduct Authority have extended mortgage holiday, which began in the spring and should have finished on Saturday October 31. It has now been extended for another six months. Under the old system, owner occupiers and landlords who needed help were able to request a payment holiday until October 31 - this is now to be extended, along with the corresponding ban on repossessions. As before, future mortgage payment holidays and partial payment holidays under this government initiative will not have a negative impact on credit files. For agents and industry suppliers with staff who were expected to come off furlough on October 31, there may be relief that the scheme is to be temporarily extended until the end of the England lockdown on December 2. Employees will receive four-fifths of their current salary up to a maximum of £2,500.
Statements by Housing Secretary Robert Jenrick and the Ministry of Housing, Communities and Local Government stated a ‘stay calm and carry on’ message to agents and the industry, urging people to continue following existing guidance. It is thought likely that the new four week lockdown in England coming into effect on Thursday will mean evictions will be extremely difficult to enforce for some months.
Although the eviction ban actually ended several weeks ago, it was agreed last week that tenants living in areas under the old Tier 2 and Tier 3 Covid-19 restrictions in England and Wales were temporarily protected from eviction. The government asked bailiffs not to enforce court possession orders in areas with the highest Coronavirus restrictions. So although evictions could still proceed through the courts, bailiffs will not enforce court orders in Tier 2 and 3 areas. Bailiff trade bodies agreed to the request made in a letter from Justice Secretary Robert Buckland who wrote: “We would request that your members should instruct the enforcement agents working under their authorisation not to enter properties that are classified as local alert level 2 (high) or 3 (very high).”
With the new lockdown in England lasting from November 5 to December 2 - at least - it is thought that the bailiffs’ decisions not to enforce evictions in high-restriction areas will be extended across England.This means that as Wandsworth and most of London is now level 2 (high) these measures from the Justice Secretary doesn't bode well for landlords who have tenants in situ already not paying their rent due to financial difficulty unable to evict them. In addition for any landlord wanting to sell - now may not be the best time - yes you would get viewings, but the offers maybe few and far between given that tenants want to stay put and landlords must provide 6months notice period plus enforcement isn't guaranteed.
The government has already said that enforcement action will also be paused over Christmas - specifically between December 11 and January11 - except in ‘the most serious circumstances’, such as cases involving antisocial behaviour or domestic abuse. It is thought likely that courts in England will still sit during the imminent lockdown and they are prioritising eviction cases involving anti-social behaviour, crime and extreme rental arrears. Practical enforcement for any eviction agreed appears likely to be on hold until mid-January. For more information about evictions follow our previous blog called Eviction Ban Has Increased Risk.
The six-month minimum notice period was introduced by the government in September and will remain in place until at least March 31 next year. However, If the tenant has a criminal conviction, has engaged in antisocial behaviour or has moved out, only 28 days’ notice is required.
Will house prices fall?
Following the first lockdown there was much talk of an impending property crash. But those predictions, have been unfounded and the Wandsworth property market has proved resilient. I suspect we will see house price growth ease, I do not expect a big house price fall anytime soon. This recession we are in is not like the one in 2008 which hit house prices more due to the banking crisis and the lack of trust which banks had between them when it came to lending as many of them were holding toxic house loans. Having said that we could have a "Tsunami Effect" where the economical consequences are latent because the government have kicked the can down the road - to save jobs - it cannot keep doing so for much longer.
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