Housebuilders in urgent talks to ease home-moving restrictions

Housebuilders are in urgent talks with the government over how to relax “lockdown” rules on the housing market in order to prevent a calamitous drop in the volume of new house building.

While a number of the largest housebuilders have heeded government calls to re-open sites in recent days, there are growing fears that the industry will remain on “go slow” until rules hindering the buying and selling of homes are relaxed.

In the days after the lockdown was brought in, the government released guidance on home buying and selling which effectively prohibited all but “critical” house moves, with all other moves deferred and valuers unable to access properties to carry out surveys.

While the guidelines on moving house are slightly less restrictive regarding new build properties, which are empty, than second-hand homes, general lockdown restrictions mean housebuilders’ sales offices remain closed, and the inability of existing home owners to sell their properties means very few will be in a position to buy a new build.

Estate agent Knight Frank has estimated that housing transactions will slump by 38% this year, leading to a 35% drop in new home construction.

Stewart Baseley, executive chairman of the Home Builders’ Federation (HBF), which represents the housebuilding industry, said the body was working with government on how to ease the guidelines. He said the current restrictions meant there will be “a limit to how much activity can proceed until the government feels able to update this guidance.”

He said: “Demand for, and the ability to sell new homes is crucial to the industry’s ability to continue to invest in land and ultimately help deliver the number of homes the country requires.

“Government has a role to play here working with industry to help coordinate and support a restart. The industry is engaging with Government on measures to assist the restart and ensure it is sustainable.”

A spokesperson for the HBF said the body was working alongside the RICS and other industry groups to get the home selling process “re-activated”. He said talks were focused on the industry demonstrating new working practices and protocols to officials in order to persuade government that the selling of new homes can be conducted safely.

Housebuilders including Taylor Wimpey, Persimmon, Vistry and Redrow have all announced plans to re-start construction, with housing secretary Robert Jenrick (pictured, left) calling on others to do likewise. Announcing a return to site yesterday, housebuilder Bellway made clear that it was only restarting “some” construction work focusing primarily on “those properties that are in the latter stages of construction.”

On Monday housebuilder Redrow, also announcing a re-opening of sites, said that “normal” trading conditions wouldn’t return until there was “a relaxation of the Government’s ongoing advice about moving home… and the reopening of sales complexes that remain closed under lockdown restrictions.”

Cenkos analyst Kevin Cammack said that housebuilders are unlikely to raise production levels above 50% for at least the next two or three months. He added that without the relaxing of rules governing buying and selling, “all you get is a return to site to finish off those homes you’ve already got reservations against – you won’t start any new things.”

Neal Hudson, founder of Resi Analysts, said new build activity was likely to track the same trend as for house sales overall, which according to figure from Zoopla, are currently running at about 10% of the normal level, with completed sale forecast to fall 50% in 2020. Hudson said: “Housebuilders aren’t going back to sites to build unsold homes. I wouldn’t be surprised if new build is affected in a similar range [to house sales overall].”

Dominic Agace, chief executive of London-based estate agent Winkworth, said the restrictions meant that those buyers remaining in the market were unable to view properties, meaning that even where they were making reservations, most of these prospective sales won’t complete without a viewing, which will require a relaxation of the rules. “New offers we’re getting are at a very small percentage of what we’d normally see,” he said.

Earlier this month the Sun newspaper reported that an unpublished study by Conservative peer Lord Gadhia and GlaxoSmithKline chairman Sir Jonathan Symonds had recommended to ministers that home moving restrictions should be among the first to be lifted, because of the beneficial economic impact that a functioning housing market has on the economy.

The government declined to comment directly upon discussions to ease lockdown restrictions on home moving. However, in a statement a housing ministry spokesman said the government was keeping the guidelines under review and that the ministry was in regular contact with all parts of the housing industry. He said: “Building the homes the country needs is a priority for the Government and we are working to protect capacity so that when normal service resumes, we can get Britain building more homes than ever before.

“We will keep these arrangements under constant review and take any further steps required.”