Lock down restrictions has put pressure on every aspect of the property market. Even more so if you have a property sitting empty, waiting for a tenant or to sell. Many landlords depend on income from their properties, so are there any options in a technically frozen market?
To help, here are some answers.
General Housing Market
House sales and lettings have effectively halted after the Government asked for estate agent offices to close down and buyers and sellers to sit tight until the COVID-19 lock down has been lifted. This extends to those who have already exchanged contracts.
Most lenders are giving their support to this freeze on house moves, extending mortgage offers for up to three months and will work with customers to help them manage their finances as a matter of urgency. This extends to helping to managing chains to enable customers’ moves to be delayed.
Meanwhile, many lenders restricted new lending to 60 per cent of the purchase price – meaning buyers would need a 40 per cent deposit – while some temporarily suspended all new mortgage applications.
The lettings market is slightly less restricted, as long as the lock down rules are followed.
What if I want to put my property on the market for sale/lettings now?
Virtual tours of properties have replaced physical appointments, owing to the lock down measures. Properties, which have a virtual video tours in place, have seen an 80% increase in online views.
Some agents are asking vendors and landlords to use video conferencing tools to produce live virtual viewings in their own property, with the agent giving, the potential buyer or tenant, a guided tour of the property.
It will be likely that virtual marketing will dominate the housing market for the next year and could alter the way the industry does business for good.
No physical inspections, photography or appraisals are allowed until the restrictions on lockdown are lifted. This means that you will not have the ability to capture any new footage or photos of the property, which is essential for applicants to view.
If you have physical marketing materials already or the means to produce them yourself, you will be able to start marketing your property.
Many people are looking at properties online because they may have more time to browse.
Can I accept offers?
Yes. However, with no guaranteed time frame on when the current restrictions will be lifted, landlords and tenants are warned against signing contracts with a definitive date, unless the property is empty and the tenant/buyer can move.
Agents and solicitors are able to continue to progress sales/lettings process from a distance and any actions that may require face-to-face contact will have to be delayed.
Have all property transactions been stopped by the Government?
No, just delayed. The Government has stated that as long as people adhere to the restrictions on social distancing and self-isolation, there is no reason to pull out of a sale or potential tenancy. It is only the contact with other people that has essentially stopped. The Government has urged that people sit tight to ensure that property chains don’t dissolve.
Can I exchange?
It is possible to exchange contracts if clauses are included in the contracts to counter the current restrictions and delay completion. If a property is empty, it may even be possible to complete and move in, as long as the social distancing measures are followed.
Can I sign a tenancy agreement?
It is not advised to sign agreements as these are set to a date. We don’t yet know when the current restrictions will be lifted and therefore the Government as advised the landlord and tenant to sit tight.
If the property is empty however, it is possible to move in, as long as the social distancing measures are followed.
If the rental property is empty and the tenancy is set to go ahead, it is advised that landlords take out rental guarantee insurance, which will cover them, in the event the tenant has no means to pay. Under writers recently stopped providing rental guarantees but some have now given the go-ahead on these. It is advisable to shop for your rental guarantees through the referencing company you elected. This may ensure that all the terms and conditions have been met if you claim.
What if I have no option but to move?
The Government has advised that if there is no-option but to complete and move, this can go ahead, as long as there is no breach of social distancing rules.
What is the guidance on removals?
Removals are possible as long as it is in line with public health guidelines and current restrictions. However, every company may have their own guidelines to follow and there may be delays due to staff shortages.
What about my mortgage offer?
Lenders have agreed to extend mortgage offers by up to three months, where completions are delayed.