/ Author: SPF

Our MD Pierre Blampied was called upon last week by both BBC Radio Guernsey and BBC Radio Jersey to offer his expert opinion on the impact coronavirus was having on the housing markets in both islands.

BBC Radio Guernsey

In Guernsey, Oscar Pearson began by asking what happens to people who can’t work but still have to pay their mortgage and also with the financial and economic uncertainty meaning that the housing market is affectively frozen, was it all ‘a bit grim’ or were there any positives to take from this situation?

Having previously discussed Isle of Man on air Oscar mentioned that homeowners there were being being offered mortgage holidays and was that also the case here in Guernsey and what were banks, building societies and the States doing to help?

Pierre was able to explain that the government don’t really get involved in the industry other than requesting banks to assist people in respect of their mortgages, but the good news is that lenders are all offering payment holidays, albeit with different approaches.

Skipton International and NatWest for example, are treating each case on its merits whereas with Lloyds and Barclays as long as you can answer the question ‘has your income has been impacted by coronavirus’ in the affirmative, will automatically offer a payment holiday of 3 months.

When asked asked what his advice would be to anyone who can’t work but still has to make these monthly payments, Pierre replied that they should contact either SPF or the lender direct as soon as they are aware they may be in difficulty. He emphasised “It is important to always take action as soon as possible, to give the bank notice and they will treat you fairly and work with you in these unprecedented times.”

Oscar then spoke to Andre Austin from local estate agent Swoffers asking if it was fair to describe the housing market as ‘in a frozen state.” Andre reported that that even in the week up to lockdown there were still transactions taking place, but now the market is effectively frozen.

It has been an exceptional start to the year up until March and they have still managed to negotiate some sales during lockdown but really all that can be done now is working on sales that are in progress at the moment as much as possible, ready for when advocates, surveyors and the banks return to full working order.

Pierre was then asked if we could take any positives from this and what he made of the packages on offer to ease hardship to which he replied that the banks have reacted very quickly, Lloyds for example, led the way to be geared up locally to give three months payment holiday to those impacted and though other lenders are treating each case individually here, that is largely because on the mainland the volumes of enquiries prevent that.

Overall lenders have acted very well and very quickly and there is another positive in that already Lloyds has reduced mortgage rates so even though the market is frozen now, when we do return to normality they will be available.

BBC Radio Jersey

On BBC Radio Jersey’s breakfast show Ashlea Tracey, started by saying that the outbreak of coronavirus would have changed the plans of anyone in Jersey who was trying to move house. Adding that Housing Minister Senator Sam Mézec had said that islanders should ‘stay put and shouldn’t be looking to move home unless it was for medical or safety reasons’ so where does this leave you if your big plans included a move.

To begin with Paul Scally from law firm Le Gallais and Luce was asked about the special circumstances when can people still move house. He emphasised that it was certainly not easy but measures had been put in place. All the people in the property sales sector have been working quite closely with the law society and the government to make sure that everyone has been kept safe as much as possible and stay within the guidelines. The courts have made it clear that they will be open for property transactions for the foreseeable future but they’re also making it clear that the public are no longer able to attend, insisting that it is only the lawyers that pass contracts. Therefore there systems being put in place to make sure that people can sign public powers of attorney without having to attend the office.

Whilst it has made things more difficult it was essential to have to look after clients and make sure that they stayed safe.

Pierre was asked what effect the advice not to move had on the housing market in terms of prices and sales and explained that effectively the market in Guernsey is frozen. There is no point in lodging a new application with a lender if you can’t have the survey done for the valuation so it’s basically a case of waiting until we come out of lockdown for the market to start moving again.

Both islands have seen good levels of transactions prior to lockdown and Pierre’s expert opinion is that there’ll be a lot of demand once we return back to normal, hopefully in the not too distant future. His one note of caution was the potential problem if we do see a longer period of lockdown, then jobs being at risk could have an impact.

Ashlea asked what impact there had already been on SPF’s business, given that people may not be coming to them for the normal range of services, and Pierre was able to say that they remained busy. SPF’s priority, was helping people whose income has been affected by the virus. He said “People have been asking what they can do with regards to mortgage payment holidays and because each banks have got different strategies on how they deal with this, we are spending a lot of time just helping people and pointing them in the right direction. What’s encouraging is that how much the banks are treating this as an important part of their role currently.

Questions were asked about landlords and Paul’s opinion was that one or two people that were going to buy investment properties had put that it on hold at the moment but that current landlords are going to have to rough it out as much as anyone else however, his advice was that if you’ve got good tenants it’s in your interest to support them if you can. Landlord insurance was unlikely to cover defaulted payments due to coronavirus.

In general, the current situation has impacted vendors, buyers and landlords. It is difficult for people emotionally as well as financially and a tough time to go through any property transaction. The advice is to stay in contact with the people advising you as much as possible and you will get there. The positives are that the industry, reflecting the islands as a whole, has come together to help anyone who needs it.