Housing market trapped in limbo

The shutdown has halted many house sales across Tayside and Fife. Jack McKeown examines the state of the housing market and its post-lockdown future.

Coronavirus has brought Scotland’s property market to a standstill, with solicitors unable to market new properties, home reports halted, viewings banned, and the Registers of Scotland incapable of recording sales.

Government guidelines mean viewings have been stopped, while surveyors and estate agents may no longer visit properties. Registers of Scotland, the government body that records property transactions, has suspended its applications record to avoid putting its staff at risk.

The virus has also affected house builders, with Persimmon, Taylor Wimpey and Miller Homes among the firms with major developments in Tayside and Fife that have closed sites and ceased viewings.

While a trickle of properties have come on the market since the lockdown was imposed, these had already had their home reports, schedules and other marketing materials drawn up.

Tayside Solicitors Property Centre (TSPC) represents 33 solicitors and markets the majority of properties in Tayside. Chairman Hugh McKay expects the market to dry up completely.

“There may be one or two sales that were able to complete before the lockdown came into effect but to all intents and purposes the property market is now on hold,” he said.

“We’ve been given various contradictory instructions by several organisations but the reality is most people don’t want to move at the moment. The difficulty will come if one party doesn’t want to move but the other does and there’s a binding contract in place. That’s when things have the potential to get unpleasant. Fortunately everyone seems to realise we’re all in the same boat and there’s a willingness to work together.

“At the moment people are agreeing to put things back by a couple of months. The big risk is if this goes on for a long time. If people lose their jobs and can’t get mortgages it could have a very damaging effect on the property market.”

Alan Baillie at Baillie Shepherd agreed the crisis will hit estate agents hard. “I don’t know any business that has enough cash for two or three months with no income coming in,” he said. “A few of our staff are still working but the majority have been furloughed.

“We had one client selling an empty house who was willing to leave a key out for viewers but we’ve ceased all viewings in line with government advice.

One of our sales fell through because the client realised he wouldn’t be able to get broadband installed at his new house. Even if people could move they wouldn’t be able to get new carpets or lots of other things you do when you move house.

“Whether this has a long-term impact depends on the duration of the crisis and if people keep their jobs. If it doesn’t go on too long and people aren’t made unemployed I would expect the market will rebound very quickly. There will be a big feelgood factor and it will really boost confidence.”

Graham Tonner is partner and head of residential sales at surveyors Graham and Sibbald. He said no home reports are being carried out in Scotland: “Home reports involve going into people’s homes and government guidelines are to avoid non-essential travel. All our staff are either furloughed or working from home. We’re not carrying out any home reports at all and I’m not aware of any other surveyor that is still doing them.”