Owning your own home

We're moving into a vacant property and I suspect the one moving into ours isn't moving in straightaway so the guidance is still a bit grey.

This is from the FT today:

Banks are pressing for a full suspension of the housing market after the UK government told buyers and sellers to delay transactions because of the coronavirus outbreak.

In talks between lenders and ministers, banks have expressed concern about the impact of the pandemic on valuations. They are also concerned about granting credit when the economy is in freefall, according to senior bankers.

They have told ministers it has become impossible to survey properties, according to people briefed on the discussion. Bank call centres have also been inundated with anxious homeowners requesting mortgage holidays.

The government has urged buyers and sellers to delay moving. It said no visitors were allowed into properties while the ‘stay-at-home’ measures were in force, including estate agents, surveyors or potential buyers.

“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,” the government said on Thursday night.

UK Finance, the industry body, has written to lenders saying it is seeking “urgent clarification” over the future of the market, “particularly as physical property valuations are no longer possible”.

A number of banks and specialist lenders have already withdrawn new mortgages to focus on existing customers and reduce pressure on call centres that are low on staff.

Lloyds Banking Group and Barclays, two of the UK’s biggest lenders, are temporarily pulling many of their mortgages. 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 will continue to offer remortgaging deals.

Bankers were keen to point out that the withdrawal of mortgage products did not signal they were running short of financing, as happened in 2008 when funding markets froze.

David Hollingworth, director at broker L & C Mortgages, said lenders were moving to cut the flow of new business as they dealt with tens of thousands of requests for mortgage payment delays.

“The purchase market will effectively go into cold storage,” he said. “You’re just not able to go out and buy a house even if the vendor wanted you to come around.”

The industry is also seeking to extend the length of time borrowers have to complete a transaction after receiving a mortgage offer, in order to stop transactions that are already in train from failing, according to two people briefed on the discussions.

Mortgage offers are usually valid for at least three months, but lenders are looking to provide a three-month extension.

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One banking executive said lenders wanted to provide flexibility but cautioned that “it does present legal challenges — what happens if a seller changes their mind in the next three months?”

Laura Conduit, a property lawyer at Farrers, said: “The strict legal position is if you have exchanged and have a completion date, you must complete on that date. It’s going to come down to how nice people are.”

She said that banks would have to decide whether their credit teams could rely on valuations using videos of properties rather than surveyors, adding: “We haven’t got a clue what the value of anything is.”