Published 30th March 2020
As the past week unfolded, so too did the Government guidance in relation to home movers and how we are expected to respond to the continuing Coronavirus crisis.
We’ve received countless emails asking for advice on which way to turn. If you haven’t yet done so be sure to subscribe to our emails and receive my thoughts and feedback direct to your inbox.
No one situation is the same and while it’s hard to give blanket advice one thing we all must do right now is continue to heed the advice of Public Health England and stay safe.
While confusing and frustrating, there will be light at the end of the tunnel although quite what life looks like on the other side we don’t yet know.
The advice for now is simple – you should delay moving where you possibly can. Think of it like a traffic light system.
RED – Stop your moving plans for now
This applies if you’re in the early stages of viewing a property to buy or rent or you’re considering selling.
If you were in the process of applying for a mortgage, lenders will naturally be more cautious about any potential change in personal circumstances as a result of government measures to contain the virus. They will want to be sure borrowers can still meet their lending criteria so it might be worth sitting tight for a while.
We’ve also witnessed this week a removal of mortgage products for loans with a high loan-to-value ratio. As surveyors are currently unable to carry out inspections or physical valuations how can the banks be sure how much to lend, or what they are lending on? Stricter criteria has already been introduced – some lenders now require a deposit of a whopping 40%!
Aside from being in lock-down, or anything else going on at the moment, the inability to borrow money will in affect bring the housing market to a temporary stand still.
I’d encourage you to speak to a mortgage adviser to see what options there may be if you’re concerned – we can connect you here.
I was about to put my home on the market – what shall I do?
If you’ve already had pictures taken, floor plans measured, and have your EPC then in theory you could still proceed and put your home on the market and agree details with your estate agent albeit virtually.
You just won’t be able to allow people in for viewings. On a positive note, there are lots more people with lots more time surfing around on the internet just at the moment!
If you hadn’t yet started marketing your house, or preparing sales particulars etc – then my advice would be to focus your time and energies on getting your home in ship shape condition for when you can proceed.
My home is already on the market – what shall I do?
You must heed Government advise and not invite anyone into your home for a viewing.
Perhaps there is a way you could offer a virtual viewing with an interested buyer using your phone? Or use the time to answer any questions of interested buyers.
Could I negotiate a better deal as a result of this?
You can still negotiate on a property if you feel there is room for manoeuvre, but be aware the entire process is going to take a lot longer than is normally the case.
AMBER – Delay your moving plans
If you have already exchanged contracts and therefore have an agreed completion / moving date and the property is currently occupied, then Government advice is that all parties should work together to agree a delay or another way to resolve things.
There may of course be several transactions linked within a chain and so I would suggest you ask your solicitor to help.
If I delay – what about my mortgage?
Lenders are working to find a way to support people who have exchanged contracts and where a completion date has been set, to extend the terms of their mortgage by an additional 3-month period to ensure loan facilities remain in place.
Lenders will continue lend, that’s what they are in business for, BUT, will do so with a greater sense of caution. This is certainly going to be something to monitor carefully.
GREEN – Proceed under guidance of your advisers
The Government advise is that if moving is absolutely unavoidable for contractual reasons and parties are unable to reach an agreement to delay, people must follow advice on staying away from others to minimise the spread of the virus.
They say that if the property you are purchasing is unoccupied you can continue with the transaction. My only thought is – good luck with the removals!
If the property you are purchasing is currently occupied, the Government recommend that all parties should work to either delay the exchange of contracts until after the period where stay-at-home measures to fight coronavirus are in place, or include explicit contractual provisions to take account of the risks presented by the virus.
I’ve changed my mind and don’t want to proceed
It stands to reason most people will sit on their hands and just wait things out.
However, if you’re buying or selling, and have already exchanged contracts then you are contractually bound to proceed.
The Government have not said you should stop and there are significant financial implications on you if you withdraw at this stage. Do everything you can to try and work things out.
Our preferred removal providers have measures in place to support home moves that absolutely need to go ahead and move. If you need a quote then click here.
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