Many of us are struggling during the current lockdown, but those who are looking to buy or sell a property are likely to feel especially strained.
The government has essentially frozen the housing market by calling for a pause on all transactions, except those that are contractually obliged to go ahead and where an agreement to delay can’t be reached.
This has had a dramatic impact on the number of new property sales agreed, with numbers falling by 70% since the government issued its guidance to home movers.
Naturally, many buyers and sellers, and those who were planning to move into a new rental property, feel stuck in limbo and may be worried about when and if they’ll be able to proceed with their plans..
Here, we explain everything you need to know about what social distancing measures mean for your move.
- I’m buying a property and selling my home. Can I still go ahead?
- What if I’ve exchanged contracts and the moving date was agreed?
- The property I’m buying is vacant. Does that change things?
- Will I be able to book a removal company?
- Can I still put my property up for sale?
- Will I still be able to get a mortgage?
- I’m a tenant and need to move. Where do I stand?
- What if my tenancy ends during the lockdown?
- I’m struggling to pay rent and afraid I’ll be evicted. Do I have any rights?
- I’m a landlord and my tenants can’t pay rent. Is there any help?
I’m buying a property and selling my home but contracts have yet to be exchanged. Can I still go ahead?
Government advice is clear about buying and selling property: unless contracts have been exchanged and both parties are unable to delay the move date, you should not proceed with the transaction for the time being.
Due to these limitations, it makes sense to put the start of your plans on hold for now. There’s no need to pull out of your transaction, but you will need to agree to an alternative moving date with all parties involved in your property sale and purchase. You can read the government’s advice here.
What if I’ve already exchanged contracts and a moving date was agreed prior to the pandemic?
If contracts have already been exchanged, the government has asked if you can try to mutually agree to delay your completion date so that your move can take place once lockdown restrictions have eased. Mortgage lenders have agreed to extend their mortgage offers for up to three months, so that homeowners won’t have to reapply for a mortgage because they haven’t moved within the original offer period.
If you’re in this situation, get in touch with your lender and see how long they are prepared to extend your mortgage offer. You’ll also need to contact your solicitor and ask them to try and arrange a new completion date that everyone is in agreement with.
The property I am buying is vacant. Does that change things?
Will I be able to book a removal company?
The British Association of Removers, trade body for the removal industry, has advised all removal companies to cancel “all but the most essential” moves, so you may struggle to find a company to move you, unless you can prove that your move absolutely cannot be postponed. In these cases, a move will usually only be able to proceed following a full risk assessment and as long as any necessary personal protective equipment (PPE) can be provided to crew members. Get in touch with the removal company you booked with as soon as possible and find out whether they are still prepared to help, or whether you need to rebook for the move to take place once lockdown measures are relaxed.
If you don’t have a large number of items to move, car rental firms are on the list of businesses that are allowed to stay open, so you may be able to hire yourself a van and do the heavy lifting yourself. Try to make any arrangements as early as possible as these vehicles may book up quickly.
Can I still put my property up for sale?
While it may be tempting to list your property now to make the most of everyone being stuck at home and surfing the web, marketing your home online is likely to be very difficult to actually pull off.
Thanks to social distancing rules stipulating that you should not have any visitors in your home, property agents will not be allowed to carry out a market appraisal or take internal photographs that are required for marketing purposes. You also won’t be able to arrange for an Energy Performance Certificate inspection to take place if you need one, and prospective buyers won’t be able to come and look round your home.
If you’re already signed up with an agent however, they may be able to conduct ‘virtual viewings’ with the pictures they’ve already taken.
If you’re thinking about selling up, you might want to use this time to make a few home improvements so that your property looks as good as it possibly can for when the lockdown is lifted and viewings can take place. It’s also a good idea to start gathering together any information you might need for the sale to proceed, such as the title deeds for your property and any planning permission completion certificates if you’ve had building work done.
Will I still be able to get a mortgage?
As soon as the lockdown was announced, lots of lenders withdrew many of their mortgage products and restricted lending to those with a substantial deposit to put down, typically 30% or 40% of the property value.
However, recent days have seen several of them reinstate some of their products for those with smaller deposits. They have been able to do this because they are increasingly using automated valuations, removing the need for a surveyor to physically visit the property, which usually needs to happen if the homebuyer only has a small deposit.
Options remain relatively limited though, so if you need to get a mortgage, it may be a good idea to seek advice from a fee-free mortgage broker, such as London & Country Mortgages, Habito, or Trussle. They’ll be able to tell you which mortgage options you’ll have access to based on your individual circumstances.
I am a tenant and need to move. Where do I stand?
The government advises that, like homeowners, tenants should, where possible, delay moving to a new property while social distancing measures are in place, so put off your move if you can.
If you have already signed a tenancy agreement, you may have to stick to your end of the deal, which could mean that you have to pay rent on your next home even if you haven’t yet moved in. However, housing charity Shelter says that tenants should try to negotiate with both their past and future landlords about contract dates and that landlords should take a flexible approach.
Ideally, for example, your current landlord may agree for your tenancy to continue as a periodic tenancy until you’re able to move, which means that it rolls on monthly, rather than as a fixed-term contract, and your new landlord may agree to delay the start date of your new contract.
If they won’t allow this, and moving is unavoidable because you’re contracted and parties aren’t able to agree to a delay, you must follow social distancing guidelines when you move.
The government has asked landlords to offer support to tenants so that they are able to remain in their homes wherever possible. If you feel that your landlord is being unreasonable, you’re within your rights to report them to your local authority. Shelter has plenty of useful information and housing advice for those whose housing situation has been impacted by coronavirus.
What if my tenancy ends during the lockdown?
If your contract on your rented property is coming to an end, you may find yourself unable to find a new home because of the distancing rules.
If possible, ask for a month-to-month agreement as it is reasonable for you to not want to be lied in to a new long-term tenancy agreement.
I am struggling to pay rent and I’m afraid that I will be evicted. Do I have any rights?
Yes, due to the pandemic, the government has extended eviction rights for tenants.
According to the new Coronavirus Act 2020, landlords in England and Wales must provide their tenants with three months’ notice before they are able to begin eviction procedures. For those in Scotland, this period is extended to six months.
If you’ve lost income because of the outbreak and are struggling to make ends meet and pay your rent, ask your landlord to consider an arrangement whereby you reduce or stop your payments temporarily.
I'm a landlord and my tenants can't pay their rent. Is there help available?
If you are a landlord and are worried about not being able to make your own mortgage payments because your tenants can’t pay their rent, you can apply for a three-month buy to let mortgage holiday to help bridge the funding gap.
This means that when you start paying your mortgage again, the interest not paid over the frozen three months will be added onto your d payments, meaning slightly higher monthly costs.
If you need this type of support, you must notify your mortgage lender before you take any payment holiday, typically via an online application form. If you simply fail to make your payments, you will be considered to have defaulted and this will have a negative impact on your credit rating and future borrowing options. Find out more about how mortgage payment holidays work in our article Everything you need to know about taking a mortgage payment holiday.
Have you had to put a house move on hold, or has the lockdown made you re-think your moving plans altogether? You can get in touch via [email protected] or leave a comment below…