Hackney’s property market ‘on pause’ following Town Hall cyber attack

Hackney’s property market has been frozen as a result of the serious cyber attack on the Town Hall’s systems that continues to disrupt many of the council’s services.

One of the hundreds of different functions carried out by the council is the processing of land searches, whereby anybody buying or selling property in the borough should be able to receive information from the local authority within eight to 10 days on whether there are any legal restrictions that affect it.

However, following the cyber attack, the borough is unable to process land searches and is unable to confirm when it might be able to return to a full service, leaving many short on options as the end of the government’s holiday on stamp duty approaches.

Hackney resident Jessica Tye said: “I suspect many others don’t yet realise that this is impacting them. My understanding is that many lenders won’t accept indemnity policies on purchases (rather than remortgages) and buyers will understandably want to see the information that searches provide.

“I am in the process of trying to sell my flat and buy a property outside of London. There have been two of us working from a one-bed flat with no outdoor space since March so we’re understandably keen to move, something we started planning prior to coronavirus. 

“If my purchase falls through as a result of the delay then we stand to lose hundreds, although that’s secondary to how upsetting it would be to not be able to move after so many months of trying to make it happen. 

“I’ve written to my local councillors and had a sympathetic response, but the fact that over three weeks on from the attack no back-up plan is yet in place doesn’t bode well. 

“I hope it goes without saying but I’m hugely sympathetic to the council workers having to deal with managing this on top of the additional work and disruption caused by Covid, but in terms of personal impact this is potentially huge. ” 

Hackney was hit by the cyber attack at the beginning of October, blamed by Hackney Mayor Philip Glanville on organised criminals, with an investigation underway by the National Cyber Security Centre, National Crime Agency and local law enforcement. 

Among many other services, the cyber attack has affected the council’s land charges processing system, which establishes whether the land on which property is situated has any restrictions which can be passed on to successive owners, including planning or enforcement notices, tree preservation orders or dangerous structure notices. 

The Town Hall has said that it hopes to restore a partial service “in the coming weeks”, but is not expecting to be able to carry out full searches “for some time”, with no timeframe currently able to be provided. 

The council is telling those proceeding with house sales in the borough to talk to lenders or mortgage brokers about taking out indemnity insurance. 

According to Peter May, sales director at Hackney estate agents Location Location, options do exist to proceed with sales in the borough, through looking either at search indemnity, or making a conditional property exchange without the search, though May added that these approaches would necessitate a greater appetite for risk in the exchange, as well as necessitating having to convince both lenders and solicitors to proceed. 

He said: “We are already on a relatively tight timeframe because of the looming stamp duty deadline. The council are not prepared to give a date as to when they will resume returning searches, so at the moment numerous sales, probably in the hundreds, are on pause. There are a couple of options that we can look at, but both are subject to consent by the buyer, the solicitor and the lender. 

“Solicitors and lenders are typically cautious, so it is very, very difficult at the moment to give people insight as to when they might be able to move. It is stressing a lot of sales at the moment.

“Frustratingly, the demand is there. Buyers of course want to buy within the Hackney borough, so the volume of sales that we are agreeing has not changed.

“The frustration is we are unable to give any kind of insight on timeframes. I don’t think there will be any impact on prices – it is much more about timing. Unfortunately, if a buyer wants to live in Hackney, regardless of whether they’re buying a property in Stoke Newington or Hackney Wick, they are going to have the same issues.”

May added that in his opinion sales locally would not collapse, but characterised the market in the borough as “generally speaking on pause,” with the biggest challenges occuring where people are moving from one borough into Hackney or moving out.

According to Tye, her buyer’s solicitor submitted searched back in September, with the Town Hall taking over a month to return searches before the cyber attack, causing fears of a “considerable backlog” once the service begins to resume.

Planning chief Cllr Guy Nicholson said: “This criminal cyberattack on our community continues to have a serious impact on the lives of residents. It has affected services that residents rely on, and this includes disrupting the ability of the council to process land searches.

“The council is working hard to repair its systems and is working closely with the government, the National Cyber Security Centre and the National Crime Agency to recover council services but at this stage it is not possible to say when this will be.

“On behalf of the council, I can only offer our sincere apologies for the delay that is being caused to individuals and their property purchases and the worry that such a delay brings. We are hoping to offer a partial land search service and some possible alternative options in the coming weeks. In the meantime please be reassured that every effort is being deployed to recover the council’s systems.”

You can find out more information about land searches at hackney.gov.uk/local-land-charges-search