It has now been just over a month since the Government announced the easing of the lockdown measures in England which effectively allowed the housing market to open, and while there is still some way to go – including in other countries of the UK – I think there has clearly been some positive progress made during that time.
A recent raft of industry-related data appears to be confirming that. As I write this in mid-June, on just one day I’ve read of the following:
- Product search engine, Twenty7Tec, said it had seen its five busiest days for mortgage searches at the start of June, since lockdown began, with total searches for purchase mortgages hitting a new 2020 high.
- Zoopla, the property search engine, produced research that the number of property sales in the past four weeks had increased by 137%, meaning it was now close to pre-COVID-19 levels, just 12% below that level.
- Another product search engine, Mortgage Brain, said that mortgage product numbers had increased to over 9,000 while the number of product illustrations downloaded from the platform had increased for six weeks in a row and was just 10% below pre-pandemic levels.
There are plenty of other examples of positive data starting to seep through which reflects on a post-lockdown bounce, particularly in purchase activity, and I sincerely hope that our conveyancing firm members are starting to see that uplift.
Of course, we are still a long way from that much-requested ‘market normality’, there will be ups and downs and data which points in different directions. That is all par for the course. We certainly don’t want to be complacent about the future progress of the market and the fact that it could be held up or stalled by any number of obstacles, internal as well as external.
Just this week, you might have read about a number of lenders pulling out of the high LTV space. This was as a result of there being a limited number of lenders active here at a time when demand was growing and growing; these lenders felt the need to withdraw before their risk appetite for such mortgages was exhausted.
It leaves large numbers of potential borrowers – particularly first-time buyers – and their advisers in a potentially tricky situation: the demand being there, but the products/funding not. If lenders are dipping in and out of providing particular products, we are still not in any sense in a ‘normal’ situation.
I suspect there will be many other similar situations which could present some sizeable buffers to the housing and mortgage markets in terms of turning that demand into completions, and of course that will have its impact on conveyancers as they seek to try and understand what levels of business are going to emerge once that post-lockdown pent-up demand works its way through the system.
However, from my perspective, the positives are now starting to outweigh the negatives here, and from what was essentially a standing start, there is some notable progress being made.
In our own space, TwentyCi, a homebuying marketing and behaviour agency, shared some of its data with the CA recently. It carries out both a daily and weekly ‘Norms Analysis’ on conveyancing instructions and sales subject to contracts (SSTC). The latest data for daily reveals that 2,633 instructions were received, and this is only slightly down on the ‘norm’ of 2,702. The figures for SSTC are even better, with 1,429 cases having reached this level, compared to a norm of 1,355.
Again, we should be cautious about reading too much into this, and there’s no doubting that there might be a very strong argument for continuing Government intervention in the housing market should the transaction numbers prematurely plateau or start to fall, in order to incentivise activity further and maintain the economic boost which an active housing market will give the UK economy. At least those ‘green shoots’ seem to be a bit more visible than a month or so ago.
Time will tell, and I’m conscious that conveyancing firms have some very difficult decisions to make based on what the market does do next, not least in terms of furloughing staff, retention, a return to offices and how they continue to work in the future. However, I am hopeful that we are moving forward – albeit somewhat tentatively – and that with perhaps further Government support, the sector will grow into a much stronger position with every single day; I believe that the increased flexibility in furloughing arrangements for which our sector lobbied hard and effectively can only help.
Paul Smee is Non-Executive Chair of the Conveyancing Association (CA)