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Coronavirus: Call to ‘cautiously reopen’ Wales’ housing market

A house valuer

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Getty Images

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More than half of all of Wales’ 16,500 homes on the market are sold subject to contract

Calls for Wales’ housing market to “cautiously reopen” have been made to the Welsh Government after an 11-week hiatus during the coronavirus lockdown.

Estate agents and lawyers want valuers to be allowed into unoccupied properties so sales can be completed – and the housing market kick-started.

Property website Rightmove said 16,485 homes are for sale in Wales – with more than half sold subject to contract.

The Welsh Government said valuations can only happen in “essential moves”.

Ross Johnson has waited two months for a property to be valued for a mortgage and he estimates the delay could cost him as much as an extra £1,500.

The 34-year-old and his business partner bought a commercial premises in Tonteg, near Pontypridd – and did it up before lockdown started in March.

‘It’s costing me a lot of money’

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Ross Johnson

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Mr Johnson bought these premises, now fitted out as a barber shop

The father-of-one and former professional rugby player used a bridging loan to purchase the premises occupied by Soho Barbers, in Cardigan Close, and applied for the mortgage once the shop was “looking a million dollars” just as lockdown started.

But his application has been on pause since because the mortgage company wants a valuer to physically go into the premises to value it – and that is against the Welsh Government’s stay-at-home regulations.

“It’s so frustrating and very stressful because its costing me a lot of money,” said Mr Johnson, who runs Front Row Properties with Wales rugby international Rhys Gill.

“I understand the government doesn’t want to risk spreading coronavirus, but there’s no more risk for a valuer in full personal protection equipment going into an empty property than going to a garden centre or shop full of people.”

What about the Energy Performance Certificate?

Another one of Mr Johnson’s property purchases – a house in Treherbert, in the Rhondda valleys – is also stuck because the Energy Performance Certificate (EPC) has expired and an EPC assessor cannot access the property to perform the 10-yearly mandatory assessment.

“We’re stuck at the moment,” said Mr Johnson, from Beddau, in Rhondda Cynon Taf.

“We hope the government can consider giving businesses like ours a little breathing space without seemingly increasing any risks.”

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People in Wales have only been able to view houses online during the coronavirus crisis

Some banks and lenders will approve some “less risky” mortgages using so-called “desktop” or remote valuations using an algorithm, or historical valuations and local house-price data, to value a house – which means a valuer does not need to go to the property.

What’s the need for physical valuations?

Mortgage broker Michael Powell, however, points out that virtual valuations often value houses lower because the “risk to the lender is greater because of higher uncertainty”.

“The lenders are just comparing data rather then seeing if the property is well-decorated and had improvements like extensions or an attic conversion,” said the broker from Caldicot, in Monmouthshire.

“So they are more cautious as no-one likes uncertainty.

“Also, most lenders demand physical valuations on the higher loan to value products because of the added risk, making it virtually impossible for people with smaller deposits like first-time buyers.”

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Physical valuations are often required for mortgages with a high loan to value

The property market in England has been released from some elements of lockdown but with strict guidelines in place for every aspect of buying, selling, and renting.

There are 14% fewer properties on the market in Wales this year compared with 2019, according to Rightmove, as virtual viewings becoming commonplace.

But of the 16,485 homes listed for sale in Wales on their property website today, 9,424 are sold subject to contract – with houses on the market for two-and-a-half weeks longer than their usual 10-week average.

‘Transactions hitting a brick wall’

“Getting valuers and surveyors back into properties seems a suitable amendment to cautiously and carefully reopen the property market,” said conveyancing solicitor Wyn Williams.

“Where lenders are not doing electronic valuations because the loan to value is potentially quite tight, they will not issue a mortgage offer without a physical valuation being done. Those transactions are currently hitting a brick wall.”

Mr Williams said the number of transactions his office of Harding Evans solicitors in Newport are dealing with were a fifth of what they were before the coronavirus crisis.

But he says about 30% to 40% are awaiting valuations before their mortgage can be considered by their chosen lender.

“There was a little disbelief in the sector that in the slight easing of restrictions here in Wales, that something hadn’t happened to help the housing market,” added Mr Williams.

“Allowing valuers and surveying back into houses for just a few minutes for an appointment would make a huge difference to the housing market with minimal, if any, risk if full PPE is worn and social distancing respected by the occupiers vacating the premises for a short time.”

The Welsh Government’s next lockdown review is on 18 June and Conservative Welsh Parliament member Darren Millar has urged ministers to provide the property sector with a “timeline” as “entire lives have been put on hold and they need answers now”.

It’s not just the valuations estate agents hope can restart, they want the government to consider allowing agents into properties to prepare houses and flats for market ready for when it reopens in Wales.

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Newland Rennie

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Estate agent Heidi Davis wants to start “tentatively” preparing for Wales’ housing market to reopen

“They’d need to be serious sellers with a mortgage ready for their next purchase and ideally have an offer in on another property,” said estate agent of 30 years Heidi Davis, of Newland Rennie in Chepstow.

“We’d adhere to social distancing, wear PPE and ensure neither party had any Covid-19 symptoms.

“It’s so when the market reopens, we’d have all of the details and pictures ready for any prospective buyers to see so estate agents aren’t playing catch-up from day one of the market reopening.

“That and having valuers being allowed into houses where homeowners briefly leave the home, would allow the market in Wales to cautiously and tentatively reopen.”

The Welsh Government has said people are “allowed” to move home when it “cannot be postponed” as they want people to stay local to curb the spread of coronavirus.

“Where a valuation is required to facilitate an essential move then this can take place as long as social distancing measures are maintained and no-one in the household is shielding or are displaying symptoms as per our guidance,” said a government spokesperson.”

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