Government urges buyers not to move home during coronavirus pandemic
The Government has urged people not to move home in a bid to limit the spread of coronavirus.
It comes amid reports that banks are calling for a full suspension of the UK housing market.
Lenders are said to be expressing concern about the effect of the pandemic on valuations while banks are also anxious about granting mortgages during the financial uncertainty.
In a statement, the Ministry of Housing, Communities & Local Government has said that while there “is no need to pull out of transactions”, “we all need to ensure we are following guidance to stay at home and away from others at all times”.
As long as a property is unoccupied, people can continue with transactions but must ensure they are following guidelines with regards to home removals. However, if the house is occupied “we encourage all parties to do all they can to amicably agree alternative dates to move”.
A Government spokesperson added: “You can speak to estate agents over the phone and they will be able to give you general advice about the local property market and handle certain matters remotely but they will not be able to start actively marketing your home in the usual manner.”
UK Finance, the trade body representing the business and finance industry, has written to its members saying it is seeking urgent clarification over the future of the market, “particularly as physical property valuations are no longer possible”.
One property lawyer, Laura Conduit at Farrers, told the Financial Times that banks would have to decide whether they could rely on valuations using videos of properties.
She said: “We haven’t got a clue what the value of anything is.”
Meanwhile, Simon Nosworthy, Head of Residential Conveyancing at Osbornes Law said: “If parties have exchanged contracts and are completing soon we are doing everything we can to listen to our clients and their requirements, but also ensuring that they understand the advice from the government and following this as best they can in the circumstances.
“We need to ensure that the ill and vulnerable are protected at this time. Anybody in a chain who hasn’t already exchanged contracts should forget about doing so for the foreseeable future as there are simply too many variables in play to make this possible right now.
“I am advising my team to only consider carrying out transactions where a simultaneous exchange and completion is possible and the property is vacant.
“Every transaction will need to be carefully assessed to ensure that it is safe to proceed. This obviously massively reduces the number of transactions that we can undertake.”
UK Finance said lenders would extend mortgage offers for people who were due to move house during the lockdown.
Chief Executive Stephen Jones added: “Current social distancing measures mean many house moves will need to be delayed.
“Where people have already exchanged contracts for house purchases and set dates for completion this is likely to be particularly stressful.
“To support these customers at this time, all mortgage lenders are working to find ways to enable customers who have exchanged contracts to extend their mortgage offer for up to three months to enable them to move at a later date.”
Meanwhile, a number of banks and specialist lenders have now withdrawn new mortgages to focus on existing customers.
Lloyds Banking Group and Barclays, two of the UK’s biggest lenders, are among them.
Lloyds has stopped offering mortgages or remortgages through brokers unless the customer has a deposit of at least 40 per cent of the value of the property.
Barclays told brokers it would no longer offer mortgages for customers who did not have a deposit of at least 40 per cent, but it would continue to offer remortgaging deals.
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