What to consider with the regional lockdown tier system & property investments
In the midst of the coronavirus pandemic, the government guidance has changed almost daily to try to keep people safe & lower the R-rate. On October 12th, a new tier system was introduced, leading to regional locations adhering to different rules, dependent on their level of risk. This was done in an attempt to make the guidance clearer & to empower local areas & leaders to take a more important role in enforcement.
This move came as the property market was seeing a vigorous rebound due to pent up buyer demand & price growth. This was coupled with the stamp duty holiday, which also acted as an incentive & is due to end at the end of March 2021. After months stuck inside, there has been as ‘exodus’ from city locations towards homes with a garden & more surrounding countryside & green spaces.
So, what does the tier system mean for property investments & if you are a property investor what should you be thinking about? Here we answer some questions.
What are the different tier levels?
As of this November there are three different tier levels for England, from Tier One (medium risk) to Tier Three (very high risk). Under the latest guidelines, estate agents can remain open & viewings are still allowed as long as anti-coronavirus measures are taken.
Can you still list a property if it is in a Tier 2 or Tier 3 area?
Yes. Buying, selling, & renting homes in Tier 2 & Tier 3 areas can still proceed in these areas as long as the procedures follow the Covid-safe guidelines. Safety measures need to be put in place by renters, home buyers, & sellers. These include:
- Use of remote working tools to avoid in-person appointments, including video meetings & virtual tours
- Only those participants who are absolutely necessary should physically attend meetings & should maintain social distancing, including wearing a mask & sanitising hands
- Avoiding any activities or actions that could transmit the virus, such as the sharing or pens & other physical documents
- Always keep rooms well-ventilated & hold meetings outside, where possible
What about moving property in Tier 3?
Yes, all solicitors, estate agents, & removal firms can still work as normal as long as they follow strict safety guidelines. Checks should be made that no party is showing symptoms of coronavirus, self-isolating, or shielding.
What if properties are in Scotland or Wales?
Scotland has a five-tier system, where tiers are viewed on a weekly basis. The Welsh government imposed a 17-day firebreak & now has a series of rules in place on working, travelling, & meeting other households. In Scotland & Wales, physical viewings are permitted but it is advised that virtual meetings & tours are used where possible.
How is the stamp duty deadline affecting property investments?
Whilst the stamp duty holiday has provided a welcome boost to activity in the housing market, this is likely to slow down, especially as most analysts predict, the labour market weakens & the stamp duty holiday expires.
Is city-living & working officially over?
With the promise of a working vaccine, whilst a return to normality certainly will not happen overnight, if any investors are thinking about altering their long-term strategy, it may pay to hold off. Property experts believe there will be a return to office life & city living. So, for those investors with city centre flats & commercial property, they may be best placed to reap the rewards.
What about the commercial property sector?
There have been huge changes to the commercial property sector, particularly the High Streets. The trend for decaying High Streets has merely accelerated, as businesses go online & shops shut. There are now fewer shops on the average High Street, offering the services you cannot buy online, such as cafes & hairdressers. Due to lockdowns, this has led to a problem with rent arrears, which may lead to the fall of capital value of retail premises over time.