Buying, selling and moving home during the pandemic

The COVID-19 pandemic is a human tragedy that is having a growing impact on the global economy, the full consequences of which will be unknown for some time. The UK lockdown has effectively hit the pause button on many aspects of our lives, including the property market.

While there is no ban on property transactions, the government has urged buyers and lenders to delay what they're doing, and lenders have been asked to put mortgage offers on hold. If you are planning to buy, sell, move home or remortgage over the next few months it is likely your property sale or purchase will be affected.

Scaled back lending

Even before the spread of the virus, lenders were reluctant to consider high loan-to-value (LTV) loans. Now, many banks are temporarily pulling their high LTV products. Nationwide Building Society, one of the UK's biggest lenders, has withdrawn from sale mortgages with an LTV above 75%, and Virgin Money and Barclays are only accepting applications with an LTV above 60%. Other major mortgage lenders have followed suit. This is going to make it more difficult for first-time buyers who may be unable to come up with deposits of between 25% and 40% of a property's selling price.

Customers who have already agreed a mortgage don't have to worry because the changes apply to new applications only.

Expect delays

On 26 March, the government issued advice on moving home during the crisis. It said that buying and selling could continue but will probably take longer than usual, in part because people should not invite visitors into their homes, including potential buyers and surveyors.

The official advice from Number 10 regarding surveyors is they should not carry out non-urgent surveys in homes where people are currently living. No inspection should take place if any person in a property is self-isolating or has symptoms. However, the government says surveyors may be able to do some work online and conduct urgent surveys on empty properties.

The Law Society, which represents solicitors that practice conveyancing, said delays should be expected because, during the lockdown, documents cannot be signed in person or legally witnessed by others. Electronic signatures are not accepted.

Next steps

Although many people contemplating buying a new home have to delay their plans, this is a good time to do as much online research as possible. For example, studying the local markets, reading Ofsted school reports and doing online viewings. Then when the lockdown is lifted, and life starts to get back to normal, you'll have a clear idea of the way forward.

April 2020