May 18, 2020

Covid-19 Real Estate update: Government unveils plans to re-start the housing market

On Sunday 10th May Boris Johnson announced the UK's plan for a phased recovery from coronavirus, commencing with a gradual easing of restrictions and the introduction of new measures to help re-build the UK economy. Since then, the government has issued a raft of advice and detailed guidance to support this move. Measures include the immediate lifting or easing of certain restrictions in the residential property sector, which will be much welcomed by housebuilders, developers, landlords, estate agents, conveyancers and individuals involved in buying or letting a new home.

'Re-starting' the housing market

The overarching message from the government is to 're-start the housing market, (see the government's Press Release here and Guidance on Home Moving in England here).  But what exactly does this mean?

1.  Buyers can buy and tenants can rent

Since the end of March, government restrictions have brought most residential property transactions to a standstill.  As recently as last week, major housebuilders were casting doubt over new projects as the then-existing restrictions would prevent them from selling new homes off-plan.

The government appears to have listened to industry feedback as new regulations and guidance permit a range of activities designed to re-invigorate the housing market, including

  • Allowing estate agents, developers' sales offices and show homes to re-open.
  • Giving the green light for property viewings to take place (including physical viewings with safety measures in place).
  • Allowing surveyors and EPC assessors to visit properties.
  • Providing for New Build Home Warranty Assessments to take place.

2.  Many workers in the property sector can now return to work

Many workers, who play a crucial part in the operation of the residential property sector can now return to work, including:

  • Estate agents
  • Conveyancers
  • Removal companies
  • Tradespeople, e.g. fitters, decorators
  • Building contractors (see below)

in all cases, subject to compliance with the Government's new 'Working Safely During Coronavirus' guidance, which require additional measures to be taken by employers such as (where necessary and applicable) risk assessments, social distancing at work, additional cleaning, and PPE. 

Specific guidance documents have been issued to cover the measures required for eight different types of workplaces, including:

  • Construction and other outdoor work – here.
  • Offices and contact centres (e.g. estate agents, head offices) – here.
  • Working in other people's homes (e.g. tradespeople, surveyors) – here.

Businesses (in all sectors) should carefully check the general guidelines, as well as any specific guidance for their sector, to ensure they can comply before allowing business to recommence.

3.  Temporary relaxation of planning rules

The Government is seeking to assist housebuilders by introducing a temporary relaxation of planning rules, either by way of amendments to legislation or updates to planning policy. In particular:

  • CIL Regulations will be amended to give local planning authorities temporary powers to defer payments and/or disapply (or return) late payment interest for small to medium sized developers (being those developers with a turn-over of less than £45 million per annum). No doubt, this will provide a welcome reprieve as we begin to transition out of lockdown and construction work re-starts.
  • The planning practice guidance (PPG) has been amended to, amongst other things, introduce temporary powers for local planning authorities to consult and publicise applications on their websites (rather than requiring physical site notices etc.). Notably, these amendments apply to EIA development which is submitted to local planning authorities (as is the case for most large residential schemes) but not to EIA development for nationally significant infrastructure projects (NSIPs).
  • Housebuilders can apply to the local authority for flexible/extended operating hours for construction sites, e.g. until 9pm on weekdays. Local authorities are instructed to work on the presumption that such applications will be accepted.

Conclusion

These announcements will be welcome news to both those who have been unable to work in the residential property sector during the lockdown, and the buyers, sellers, landlords and tenants who have been unable to transact during that time.

Whilst the new guidance does not in any way guarantee nor signal an immediate return to normality it marks a step in the right direction, and serves as a useful roadmap to help housebuilders, developers, estate agents and conveyancers understand the steps they may take to return to work.  Whether the Government succeeds in re-starting the housing market remains to be seen.

It should also be noted that these measures have not been adopted in Northern Ireland, Scotland and Wales.

For more information or advice, please get in touch with your usual Clyde & Co contact.

This article was written by Paul Cole and Emma Barkas