Government halts property completions: What are my options?

Last week the Government advised people to delay house purchase completion and moving house. This recommendation throws up a lot of questions for those currently buying or about to buy a property. Our Sales Director, Jeni Browne, explains what this could mean for you...

Over the last few weeks we have covered many of the impacts that the COVID-19 pandemic is having on house buying and the mortgage industry. Last week, the Government went further to advise that home buyers should avoid moving. But what does that mean to people in the process of buying a property?

I’ve found a property I want to buy, should I or should I wait? 

If you have found your ideal property, either for your own home or to rent out, then don’t be put off by putting the wheels in motion now. The first challenge that you will need to overcome is finding the right mortgage for your property. There has been significant turbulence in the mortgage market with many lenders withdrawing or repricing products to help cope with the impact on their workforce. But, if you have a healthy deposit and can go to a 60% LTV, there are plenty of mortgages and lenders to choose from. Some lenders will still consider over 60% LTV, but be aware that the level of choice is now quite restricted compared to before the coronavirus outbreak.  

Once you have found your mortgage, it is worth remembering that everyone is in the same boat, and while the process to purchase is likely to take longer than usual, your property vendor will likely understand that too. 

I have a decision in principle, is my property likely to get valued?

With the Government lockdown, designed to restrict social movement and combat the spread of COVID-19, it has meant that many valuation companies have decided not to send their staff out to value houses. But all is not lost! Some valuers are still working, and you may be able to get a desktop valuation. 

If you are unable to get your property valued because of the restrictions, it’s essential to get your paperwork in as soon as possible. The lenders are queuing up their valuation work as the paperwork comes in so that when the valuers can get out to houses again, they will be going through them chronologically. 

Read more about valuations in the COVID-19 lockdown here

I’m waiting to exchange contacts, will I be impacted?

Due to the delays recommended by the Government, you may be delayed in exchanging contracts. I would recommend speaking to your mortgage broker to get an update on your individual circumstances. 

I have exchanged and I am waiting to complete, will I be able to complete while the lockdown is in force?

Following the Government’s announcement advising people to delay completions, it is undoubtedly causing concern and uncertainty for those waiting to complete on their property purchase. They want to avoid unnecessary contact that comes as part of moving house. 

If you are moving into a vacant property, then the Government are okay for the move to go ahead, providing you aren’t self-isolating or shielding. You will also need to factor in the risk to any people assisting with your move, such as removal companies. 

If you are unable to move because of the social movement restrictions, mortgage lenders are to give customers who have exchanged contracts the option to extend their offer for up to three months, to allow you to move at a later date. 

Robin Fieth, Chief Executive of the Building Societies Association (BSA) said:

“Lenders and borrowers face an unprecedented set of circumstances. People who would have been preparing and expecting to move house in the coming weeks now face a wait until Covid-19 restrictions can be lifted. Our hearts go out to them and our heads are clear that it would be unfair for these people to have to start their mortgage application all over again once life returns to a more normal state. A three-month extension of existing mortgage offers seems a fair and reasonable step to take.

“It is possible that some borrowers financial circumstances may change during the three months. If this happens, or the terms of the purchase change we will work closely with the borrower to achieve a sensible outcome.”

If you are in the process of a mortgage application with us, or you are looking to purchase a new property, please contact us. Our dedicated team of mortgage consultants and case managers will help and support your application from start to finish: Call 0345 345 67 88 or email enquiry@mortgagesforbusiness.co.uk. 

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NB: ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

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