Coronavirus property Q Can I move house during lockdown, or should I hold off buying and selling a home?

Melissa Lawford
A Purple Bricks for sale sign outside a home - Hollie Adams/Bloomberg

The government has effectively frozen the market, calling on Thursday evening for a pause on all transactions, except those that are contractually obliged to go ahead and where an agreement can’t be reached to delay.

This has left many buyers and sellers painfully in the lurch. Some have been left in self-isolation while having to legally complete on their property; others in temporary accommodation waiting to exchange have been told everything is on hiatus. Surveys, viewings and valuations are nearly impossible. Meanwhile, Savills anticipates a 5 to 10 per cent short-term fall in house prices. Recovery will be dependent on the state of the UK economy.

So what should you do if you need to move house? Over lunchtime on Monday, Melissa Lawford, The Telegraph’s property correspondent, Thea Carroll, who runs the Thea Carroll Property Consultancy, and Andrew Boast, director of SAM Conveyancing, answered your questions on the state of the property market.

Here, you can read a selection of the highlights from the Q&A.

'I read a forecast that prices could drop by 20 per cent, is this true?'

Thea: I think this figure is too high. What we are focusing on is the type of recovery the economy is likely to have combined with the current dynamics of the property sector.

A popular theory at the moment is a 'V-shape' recovery, which means that there could be a recovery by April-June 2021, according to Oxford Economics. Second to that is the supply/demand balance and low interest rate mortgages. There is still a pent-up demand there and this will only grow over the next three to six months for those who need to move.

Unlike 2007/08, people’s mortgages are at more serviceable levels of interest, so it’s more likely they’ll be able to absorb the impact. These notions support the theory that prices may wobble but more likely between 5 to 10 per cent.

Melissa: Before the housing market crashes in the early Nineties and in 2008, house prices had been rising at a very fast pace. By contrast, coronavirus has hit at a time when, though the market was starting to recover, prices had been gradually declining relative to inflation.

Many of the deals that were agreed before the outbreak already involved significant discounts. It is a good sign that the market was nowhere near as volatile as it was before previous crashes.

'Is it prudent to try for a discount days before completion?'

Thea: Whilst it’s theoretically possible to chip the price post-exchange, I’m afraid they hold better cards here. Neither party is obliged to change the agreement, so they can just say no while you’re still obliged to complete in full or you could lose your deposit.

If there are exceptional circumstances whereby the pandemic has caused you to be unable to gather the full completion monies, you should appeal to their understanding but know that it’s unlikely that they will concede.

'Can I still get a survey done?'

Andrew: There are still companies out there undertaking surveys as the RICS hasn’t said that surveyors can’t: the organisation presently takes the view that its surveyor members should assess the risk on an individual basis. The question is: “Do you need your survey right now?”

If you can hold off from getting your survey until the housing market starts back up and social isolating has eased then you can book your survey at that point with more reassurance that the transaction won’t fall through with you losing the money you paid for your survey.

If you must get a survey as you are likely to exchange and complete in the next week or so, look for a company that is still open. They should adhere to Government guidelines and make sure the property is vacant when they conduct the inspection or, failing that, when the owners are out taking either taking their daily exercise or shopping for essentials.

Under no circumstances should a survey be undertaken on a property when any of the household has tested positive for Covid-19 or has symptoms.

'I am close to completing on a house. Should I try to switch my mortgage from a two year fixed to a tracker?'

Andrew: The challenge is logistics. Changing the terms of your mortgage may mean you need to submit a new mortgage application and at present certain mortgage products have been pulled in their entirety. You may not meet with some of the mortgage lender’s new lending criteria.

By looking to change your mortgage product, you may then miss the opportunity to exchange and complete on the property with your existing mortgage offer (you can’t have two mortgage offers at the same time). By delaying the transaction to secure a new mortgage product, the seller may choose to pull out or the mortgage lender may look to revalue the property.

The question is with a mortgage offer and a completion nearby would you prefer to buy the property now with the deal you have or wait to try and secure a better mortgage? You should speak to your bank or mortgage broker directly to see if they’ll agree to move you onto a new mortgage term without any disruption to the transaction.

'Should I still list my property for sale?'

Thea: If you have already identified a property you’d like to buy, it certainly can’t hurt to attempt the sale of your property. Given that no viewings or valuations are permitted, so long as the agent already has all of the pictures/videos required to launch and you can find a buyer that has more than a 40 per cent cash deposit, I would give it a go to try and tie together a sale/purchase with a delayed completion. Your risk? More conveyancing costs. If it doesn’t work out, you can always try again in the summer.

Melissa: While it will be much harder to finalise the sale of your home during the outbreak, you might find that it is a good time to drum up interest. More people have time for internet browsing. When China was in lockdown, IQI Juwai, which helps Asian investors buy property abroad, saw a big spike in web traffic while Chinese buyers browsed homes.

'We have exchanged contracts and are due to move on April 14. Where do we stand legally and what are our options?'

Andrew: The legal position is that you are both contractually bound to complete on the day of completion, regardless of the coronavirus outbreak. If for any reason you fail to complete, completion monies don’t arrive or the property isn’t vacant, then the defaulting party will be served notice to complete within 10 days. Some ideas which might help are:

1. Stay in contact with the chain either through your estate agent or, if you have their details, direct with the seller. 

2. Send completion money to your solicitor as soon as possible. Normally, you send your completion money the day before completion, ready to go out first thing the next day to the seller’s solicitor. However, to rule out any issue with sending money you can do so sooner rather than later. Beware of fraud though and never use emailed bank details.

3. Ask your mortgage broker to keep in contact with your mortgage lender and report any changes to your mortgage lender immediately.

If there is an issue on completion here are some of the good faith options:

1. Delay the completion until the parties can complete.

2.  If the top of the chain can move out, or if it is vacant, then the chain could move in under licence, i.e. they physically move in, but completion takes place at a later date.

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