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Mortgage offers extended three months as only ‘critical’ home moves allowed

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Written by: Owain Thomas
27/03/2020
Mortgage lenders will extend offers for borrowers who have already exchanged contracts by up to three months as the government urges people to delay or not begin the process of buying or selling a home unless it is absolutely critical.

The move to offer mortgage extensions comes as the industry has been significantly affected by the restrictions imposed as part of the coronavirus pandemic, such as no in-person valuations or solicitors witnessing contracts.

Lenders already quizzed the government about shutting down the housing market after communities secretary Robert Jenrick tweeted that moves should be delayed wherever possible.

And now there is much needed clarity as trade bodies UK Finance and the Building Societies Association agreed for mortgage lenders to extend offer terms by three months where contracts have already been exchanged.

However, there’s no need to pull out of transactions. The organisations are working with conveyancers to establish a standard legal process for moving completion dates.

The Ministry of Housing, Communities and Local Government guidance emphasised that in-person viewings by prospective buyers or estate agents should not be conducted under current restrictions.

However, it does permit surveyors to conduct urgent surveys on empty properties or where the occupants are out, providing the tradesperson has no Covid-19 symptoms.

And government powers issued to police forces for enforcing the national movement restrictions allow an exemption for ‘critical’ home moves.

This includes if moving is unavoidable for contractual reasons and the parties are unable to reach an agreement to delay.

However, people must follow advice on staying away from others to minimise the spread of the virus.

Key points

The guidance sets out these key points:

  • Home buyers and renters should, where possible, delay moving to a new house while measures are in place to fight Covid-19.
  • If contracts have already been exchanged and the property is currently occupied then all parties should work together to agree a delay or another way to resolve this matter.
  • Anyone with symptoms, self-isolating or shielding from the virus, should follow medical advice which will mean not moving house for the time being, if at all possible. All parties should prioritise agreeing amicable arrangements to change move dates for individuals in this group, or where someone in a chain is in this group.

It also highlighted difficulties that are likely to occur should people attempt to buy or sell a home during the restrictions and recommended those thinking of selling should use the time to start gathering together all the information needed for potential purchasers.

“Getting your home onto the market may be more challenging than usual in this period,” it said.

“There should be no visitors to your home. 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.”

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