The London housing market has been frozen following instructions from the government for real estate agents to close up shop until the coronavirus lockdown passes. Buyers and sellers are being asked to hold off on moving home as much as possible.
The Ministry for Housing, Communities and Local Government issued advice that those scheduled to make a move should wait until the coronavirus-related “stay-at-home” measures are lifted. Even those who had contracts in place have been told to wait until the lockdown passes.
Housing Secretary Robert Jenrick called on those in real estate to be pragmatic about delaying their moves, especially if someone involved in the process is currently in isolation or is taking extra steps to protect themselves. He said that people can move if they need to, but that they should still maintain safe social distancing practices throughout.
Mortgage lenders will help to support those in need – and the delay on moving homes in general – by extending their mortgage offers by three months. If something happens to a borrower during this time, or the house price changes to the point it would cause significant financial hardship for them to continue the deal, then lenders will work with them to better manage their financial situation.
Lenders understand that many people interested in moving home are going through a lot of uncertainty over the covid-19 outbreak. It wouldn’t be right for people in isolation or shielding to move to a different home right now. Lenders and other professionals in the industry are working with those customers to enable them to make their moves safely and effectively when the time is right.
Some lenders are taking extra steps and have limited borrowing to 60% of London property prices. Buyers would have to put up a 40% deposit by themselves. Other lenders have completely suspended new applications for mortgages for now.
Prospective sellers with properties on the London housing market without offers are advised to keep waiting until the danger passes. Home owners are encouraged to use the extra time provided by the lockdown to fully prepare their homes ready for when everything is over and done.
Virtual home tours have taken over in-person visits of houses. Appraisers, lenders, and surveyors have also been told to stay out of homes for their jobs and are relying on these virtual tools too.
Customers can always speak to their real estate agent over the phone to get general advice about the market. It’s still possible to do some things remotely and have some access to the market, but the way in which homes have to be marketed must change.
The government issued these new warnings and recommendations following a demand for clarity from the real estate sector. Agents, buyers, and vendors needed more information about how social distancing will affect them. For now, the government advises people to not move home until, at the very least, the lockdown passes. It may be prudent to wait until the pandemic as a whole has passed if possible.