UK Housing Market Halted After Pleas From Banks
In light of the current coronavirus crisis, the UK government has responded by suspending the country’s housing market on Thursday, preventing estate agents from putting new homes on the market and halting visits from potential buyers to properties already for sale.
Banks Plead For Action
The government reactions are a direct result of banks pleading to freeze the UK housing market after talks between ministers and lenders.
Banks are concerned about the pandemic’s impact on valuations and their ability to grant credit when the economy is facing a downturn.
Ministers have been told that it is no longer possible to survey properties and bank call centres have also been flooded with calls from concerned homeowners appealing for mortgage holidays.
After urging sellers and buyers to delay moving temporarily, the government has now implemented a blanket ban on moving homes during the country-wide isolation period.
On Thursday night, the government released the following statement:
“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.”
Lenders have now agreed to extend the length of time borrowers have to pay mortgages in order to prevent transactions that are already in process from failing.
Usually, mortgage offers are valid for a minimum of three months, but, for customers who have exchanged contracts, they will have the freedom to extend the offer for their mortgage for a further three months so that they can move later in the year.
Laura Conduit, a Farrer’s property lawyer, 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 also said that banks would have to decide whether or not their credit teams could depend on valuations that are made from viewing video footage of properties rather than using surveyors.