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Coronavirus and the residential property market – your questions answered…

Scotland has now entered an extended period of lockdown measures involving the restriction of movement for only “essential” purposes and the limitation of social contact. For an industry which is so dependent on personal contact and physical interaction, the current measures have created unprecedented challenges for the property market.

The Scottish Government, following the UK Government, issued guidance on 31 March in response to the announcement of social restrictions which apply to purchasers and sellers of residential properties and also to legal and other professionals who engage in this work.

So, what impact do the guidelines have on property transactions during lockdown?  

The Date of Entry in my purchase or sale is scheduled during lockdown restrictions. Can I proceed?

The guidance provides that purchasers should, where possible, delay their moves until the easing of the most restrictive measures. It encourages all parties to engage constructively and amicably with a view to reaching an agreement on an alternative Date of Entry (DoE), or settlement date that works for all.

In addition, purchasers and/or sellers who are required to self-isolate or who are deemed at enhanced risk from COVID-19 should not be forced to move in or out of properties during the lockdown period. This extends beyond the immediate parties to a transaction to other parties in a chain of dependent purchases and sales. 

Where settlement or legal completion must take place, for instance where significant economic or personal hardship will arise from any departure from an agreed DoE, the removal process must be compliant with social distancing requirements. In addition, the property into which the move is taking place must be unoccupied (for example because the previous owner has died or was resident at a nursing /care home prior to settlement), alternatively must be capable of being safely vacated, respecting current restrictions.

To summarise, under the guidelines it will only be appropriate to proceed with a sale and purchase involving a physical move in very limited circumstances:

by the mutual consent of all parties (including all parties within a chain of linked purchases and sales);
where the entry date has been previously negotiated and agreed;
where the property to which the purchaser is moving is vacant for a period prior to the DoE itself; and
where the physical removal may be completed in conformity with social distancing requirements.

I have not yet agreed a DoE in my purchase or sale. Is it possible to agree a move during lockdown?

The guidelines state that purchasers and sellers should not agree a DoE during lockdown, where there was no previous agreement. There may also be practical difficulties in arranging a removal during lockdown, as it would be difficult to source contractors prepared to agree new contracts for moves during lockdown. This may lead to sellers being unable to offer their purchasers vacant possession of their properties and may also prevent purchasers’ physical relocation. It would be up to the purchasers moving to vacant properties to choose to complete settlement with the physical move to follow once lockdown is eased. 

I have not yet concluded missives for my sale or purchase. Can I do so during lockdown?

The guidelines recommend that conclusion is delayed until restrictions are eased or that contracts are negotiated to include legal protections for both purchasers and sellers, such as the lapse of a mortgage offer during that time.

I am purchasing a newbuild property from a developer. Is this likely to proceed during lockdown?

Those purchasing new builds may find projected, or “anticipated” Dates of Entry are pushed back considerably due to the current prohibition of “non-essential” construction and also the suspension of inspections by Local Authorities, the NHBC and other Home Warranty providers. Therefore, it is unlikely that you could complete a purchase of newbuild property during lockdown.

Can I note interest in and/or submit an offer for a property during lockdown?

The guidelines confirm that agents may continue to accept offers on behalf of their clients during lockdown. A number of firms are offering “virtual viewings” and are operating a “viewing registration service” for interested parties with a view to securing a physical viewing when possible.  If submitting an offer based on a virtual viewing, you may wish to consider making the offer subject to a physical viewing once possible. You should also bear in mind that if the offer is made subject to survey, this will not be carried out until restrictions are eased.

Can I continue to market my property during lockdown?

The guidance advises that marketing may continue without interruption during the current restrictions, but may be hampered by the inability to offer “in person” viewings and survey access.  However, there are encouraging indications that demand for residential properties remains consistent. A number of Edinburgh agents have reported (via weekly surveys conducted by ESPC) that they have received and accepted offers on properties subject to a physical viewing post-lockdown and that some have experienced a number of competitive closing dates with multiple offers received, including some in excess of Home Report value. 

I am considering selling my property, but it is not on the market.  Is it possible to commence marketing during lockdown?

It is unlikely that agents will be in a position to bring new properties to market during the lockdown. This is due to the impact of social distancing measures on surveyors, valuers and photographers who would be unable to generate Home Reports and advertising material. However, agents may undertake work in preparation for a post-lockdown launch and many, including Balfour+Manson, are offering a virtual valuation service via Facetime or Zoom apps to potential sellers.

How can Balfour+Manson help?

As always, any specific queries related to a property transaction should be referred to a solicitor.  During these uncertain times business is naturally taking longer to progress, so please be patient. Our property sales and legal conveyancing team are very much “open for business” and are working remotely to assist you. 

Get in touch with our property team on 0131 200 1234.