By Richard Hepburn
S many of us consider what life will be like once lockdown restrictions begin to ease, no-one can be under any illusion that tremendous challenges lie ahead when it comes to reigniting our economy.
Everyone appreciates the difficult decisions which continue to be made to protect human health and manage pressures on our NHS during the Covid-19 pandemic. Packages from government to support businesses and safeguard jobs have also been very much welcome.
And, while it can be difficult to look too far ahead while living with the daily realities of coronavirus, I am not alone in thinking that it’s incumbent on everyone to do everything possible to ensure the sharp shock that our economy is enduring does not become an extended depression.
Like the wider response to this unprecedented emergency, this is something we must approach with collective responsibility. For the property industry in which I work, this must be backed by government support.
With a spirit of collaboration, my colleagues at land and property search agency Millar & Bryce have joined forces with estate agency organisation SPC Scotland and finance firm First Mortgage to call on the Scottish Government to create a Housing Market Recovery Plan as a vital line of defence against the threat of a prolonged dip caused by coronavirus. This will support buyers and sellers as well as businesses in the property chain.
Clearly we are focused on ensuring the home-moving industry can restart safely once stay-at-home measures are lifted. But the complexities of our sector mean that ending the current pause on the market will not see it immediately bounce back.
Anyone who’s been involved in buying or selling a property will appreciate that the pipeline process means many businesses involved do not often receive income until the transaction is completed– a model designed to protect consumers from financial risk.
That leaves a dangerous gap which jeopardises jobs critical for completing vital home moves. Support is needed to address this and, together Millar & Bryce, SPC and First Mortgage are seeking this.
We have written to senior politicians, asking them to get the home market moving quickly by having it classified as one of the first sectors to be able to restart work, within the confines of the best public health guidance and with clarity for industry and consumers on what a “safe move” looks like.
With legislative support we also want to see protection for home movers with – where feasible – lenders honouring mortgage offers until missives can be concluded, maintaining existing policies on loan-to-value ratios to prevent prohibitively high deposits and to not tighten credit scoring to penalise those who have needed to defer mortgage payments due to furlough.
To help stimulate the market, we believe a reduction of Land and Building Tax for 18 months – while extending the qualifying period for Additional Dwelling Supplements for refunds to 36 months – would prove hugely beneficial.
Finally, we would like the Coronavirus Job Retention Scheme expanded for a number of months for previously financially resilient businesses to help bridge the income gap following the market restart.
It’s clear that we cannot afford a repeat of the damaging uncertainty which followed the financial crisis of 2008. Government must work with our industry to develop a plan for its immediate future. Protecting the housing market will help our economy grow.
Richard Hepburn is Managing Director of Millar & Bryce
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