Just seven days ago, all eyes were on the new Chancellor and we were concerned as to whether there would be a Mansion Tax announcement in the Chancellor’s Budget. There had been much chatter about the potential implications that would have on the property market and ongoing discussion about possible reductions in Stamp duty and changes to council tax banding.
A week on and those things are out the window and our primary current concern is whether there can be a property market at all. We find ourselves having to navigate through uncharted territory and the knee jerk reaction of the majority of our clients is to stand still.
No doubt in the coming days and weeks, once we have taken on board and ‘digested’ the trauma of events and the logistical issues we all face, those that have decided not to buy or sell will reconsider their positions and realise that daily life though compromised in the shorter term, will recover in the longer term.
With several buyers having had 30% wiped off their stock portfolios, one assumes they will not be rushing any time soon to buy. What about those sellers that have seen 30% of their wealth vanish – they may need to sell sooner rather than later.
What does seem clear, is that for the foreseeable future, a considerable number of employees and businesses will be able to work effectively from home and still continue to be productive.
As a result of this, homes that lend themselves to being suitable for this purpose may well have an edge in the market. It highlights the importance of having a suitable room or space to work from, away from everyday life distractions and somewhere that you can use comfortably and practically as a home office.
And so, what about those contracts that were exchanged a few weeks ago. Will all buyers actually be in a position to complete on those transactions? No one will be surprised to read that buyers, as well as sellers, are putting transactions on pause that they were midway through. But it is really imperative that the emphasis is on ‘pause’ and not terminated.
We have a client selling a large house in North West London with a sale in hand and a buyer wanting to exchange contracts. Those sellers were buying a flat off plan in a new development. They now have concerns that the construction of the new development may be put on hold, either for logistical reasons or financial, or both. For this reason, they have decided not to sell at the moment as they just cannot be sure that they will have home to move into when completion takes place on their sale.
It may feel like we are living in a property bubble, but at some point we will certainly come up for air and in the meantime, people in doubt should take time to pause, reflect and talk about their concerns with their agent and come up with a plan and longer term strategy without putting their whole lives on hold.
By Marc Schneiderman, director at Arlington Residential