Leading land agents Aston Mead say that their sector is continuing to operate in a way which has been relatively untouched by the coronavirus pandemic.
Unlike estate agency, which has reportedly seen a drop of around 90% in the level of property sales for the time of year, Director Richard Watkins says that land deals are taking place much as they were before the crisis.
He explains: “We certainly haven’t stopped working during lockdown. Deals are still being agreed and exchanged and clients are still calling us for development opportunities. We’re hearing from developers who still want to buy sites and see no reason not to proceed. So far, it has been as close to business as usual as we could have hoped for.
“We have a number of estate agency partners who pass us land opportunities – and very few of them have had deals fall through on back of the pandemic. All of them are in regular touch with their sellers and buyers, and they report that the majority of them want to continue to sell and buy, just as soon as the lockdown allows.”
Richard Watkins says that whilst some developers have been a little wary about buying sites with planning permission in place because they are less certain about the immediate future, those buying sites on which they are hoping to get planning are still going ahead and are hungry for more.
He says: “Recently, we’ve had three deals involving SME developers – in Haywards Heath, Maidenhead and Oxted – all of which were agreed at the end of last year or the beginning of this one. They have all exchanged, without fail, in the last couple of weeks. If people were expecting such developers to sit on their hands and do nothing during lockdown, that’s certainly not the case!
“Their thinking is that it’s going to take 6 to 12 months to get planning permission and another 12 months to build – so they are at least 18 months to 2 years away from having something on the market to sell. That’s a long time – and they are expecting normal life to have returned by then.
“In fact, we’ve only lost one sale due to lack of funding. It was an unconditional purchase of a site in Berkshire, because the bank pulled the plug due to the higher than normal risk factor of that site. So it’s possible that there will be a drag on business for the next six months or so, as people get used to the new normal. But we see this as a more of a temporary blip, rather than a long curve down the spiral.”
Richard also says that he nature of the business they carry out and advances in technology have combined to leave them well placed to deal with the current crisis.
He explains: “Social distancing is easy for us because we tend to operate using online development software – certainly in the first stages of a land transaction. Some sellers are unlocking their site and leave prospective buyers to take a look around entirely by themselves. And we’re currently close to agreeing a deal which has so far been carried out entirely via Zoom; we’ve not met the landowner nor buyer face to face, and haven’t yet needed to visit the site at all!
“The truth is that before the virus struck, the UK was building 200,000 homes a year. The target was 300,000 – but even if we only return to the 200,000 figure in the future, we’ve still got to deliver those homes.
“For many investors, this situation will present itself as a very good buying opportunity. Some people will dither; some will sit on the side-lines. But we’re very good at adapting in this country.
“As a team we have adopted a positive attitude throughout – which has certainly helped – and have been careful not to talk ourselves into a worse market on the back of the often gloomy predictions out there. And as the rental market is showing a massive pent up demand from tenants, I’m convinced that the property market will find a way through this. Meanwhile, in land agency, we’ll keep working as we always have done.”