Covid-19 and your House Purchase
Can I still buy a property at the moment?
The Coronavirus health pandemic is impacting many areas of our lives. In particular, many customers have asked us whether they can proceed with a planned property purchase this year. With this in mind, we have looked at Covid-19 and your house purchase and summarised the main issues we think our clients will find useful.
As always, our experienced team is at the end of the phone to help answer any questions. Our whole team is currently working from home with all our systems set up to help our clients in the usual way. This is a changing situation and our team will stay on top of developments in order to provide you with the most up to date information. Contact us if you have any questions.
Can I still go ahead with my house purchase?
The Government has provided clear guidance around Covid-19 and your house purchase. You can read the official guidance here.
The main point you should take away from this is that there is no need to pull out of your house purchase because of Coronavirus. And, if you are planning to sell your house or buy a new one, then you can still proceed. However, you may be asked to delay your purchase if you possibly can.
This is because the advice from the Government is that home buyers should, wherever possible, delay moving house until the current isolation measures are no longer in place.
I’ve already exchanged contracts. What should I do?
If you have already exchanged contracts and you have a Completion date, there is also clear guidance.
Government advice is to try and work with all parties in the chain to try and agree a delay. All parties are being asked to be flexible wherever possible in order to hold off with house moves until the social isolation measures are no longer in place.
However, if moving is unavoidable then the house move can still proceed. The guidance is that people must follow advice on staying away from others and do everything they can to minimise the spread of the virus.
I’m looking to purchase an empty property which I plan to rent out. Does this guidance impact me?
If you are purchasing an empty property as a buy to let or as a development opportunity, this can still proceed. So long as the property remains unoccupied, purchases can proceed as normal.
Will my bank consider an extension to my Mortgage Offer given that the sale is likely to be delayed?
When you apply for a mortgage, the lender usually provides you with an end date to your Mortgage Offer. In usual circumstances, this is to help ensure they can revaluate your financial circumstances should the property purchase be delayed.
Because home movers are being asked by the Government to delay purchases, UK Finance have asked all mortgage lenders to extend Mortgage Offers for up to 3 months. This is to enable customers who have exchanged contracts to move at a later date.
Are surveyors still able to value my property?
In our experience, surveyors are not carrying out physical surveys. This is because The Government has provided clear guidance to surveyors that they should not be going into people’s homes. So this is a key thing you need to consider around Covid-19 and your house purchase.
However, what mortgage lenders are doing is carrying out more AVMs (Automated Valuation Model), also known as Desktop Valuations. A desktop valuation is an automated computer valuation which is carried out using things like property data, recent comparable sales and property listings.
This type of valuation can be done remotely without a valuer needing to physically visit the property so is a useful tool for people looking to move house right now.
The downside is that these are being limited to purchase transactions that are 75% loan-to-value or under, with very few carrying them out at 85% loan-to-value or under. So unless you have a large deposit, you may have to wait until social distancing/isolation restrictions are lifted for a surveyor to physically value your property.
I’m thinking about buying a house this year, when should I speak to a Mortgage Adviser?
We are advising clients to contact their mortgage broker sooner rather than later if you are thinking of buying a property. This is for two reasons.
Firstly, it is more important than ever that you get your financial matters in order before proceeding with a purchase or taking on any new commitments. And, we will take the time to fully evaluate your financial situation and help you understand what you can afford and what impact future mortgage payments could make on your finances.
Secondly, purchases are taking longer than usual and therefore it’s vital that you get your ducks in a row as soon as possible.
Can I still list my property for sale?
It may be more challenging to get your property on the market than usual. This is because you can’t invite anybody into your home. So people like estate agents and Energy Performance Certificate Assessors can’t come into your home to carry out their usual appraisals.
You should therefore use this time to evaluate the Estate Agents in your area and choose which you intend to use. And, to get your property in optimum condition so that, when the social isolation restrictions are lifted, your can list your property for sale as quickly as possible. Estate Agents may also have buyers on their books who are looking for properties like yours and may be able to get future viewings in the diary.
Is there any help for me with regards to my current mortgage?
If you have a mortgage, most of the main banks and lenders have released details of how they will be supporting customers. Most are allowing customers who have been impacted by Coronavirus to take a break from paying all or part of their monthly payment for a period of up to three months.
You should remember that this a deferral of the payment and isn’t free money. This means it will increase the total amount you owe. If you are concerned about meeting all or part of the mortgage payment because of Covid-19, contact your bank as soon as you can to talk about options with them.
How Can Your Mortgage Expert help?
If you are interested in having a no obligation chat about your mortgage or about any of the questions we have raised in this article about Covid-19 and your house purchase, why not get in touch? We don’t charge anything up front, so by speaking to us, you are under no obligation. We are based in Salisbury, Wiltshire, but we can help you no matter where you live in the UK.
Simply call us on 01722 322683 or complete a contact us form on our website and tell us when it would be best to get back in touch with you.
The information contained within this article was correct at the time of publication. It is intended for information only and does not constitute advice. Neither Your Mortgage Expert Ltd nor TenetLime Ltd cannot be held responsible for information that was correct at the time of publication but subsequently changes or goes out of date due to changes in legislation. For further information, contact Your Mortgage Expert on 01722 322683.