Can I move house during the second lockdown?
- Credit: Archant
With the onset of the second Covid lockdown there are now many things that people cannot do. But what does it mean for those wanting to move house?
From Thursday, people have been told to work from home and non-essential shops will have to close.
Before a government U-turn this week pubs were even told they could not sell leftover beer to take away.
But what does it mean for one of the economy’s key drivers – the housing market?
We asked some property experts what impact they thought the second lockdown would have on buying and selling property.
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Here is what they had to say:
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Tom Orford, who leads the residential team at Savills Ipswich, said: “Current indications are that, subject to safe working protocols, the housing market will stay open during November. This will no doubt come as a relief for those people who have become much more committed to moving over the past six months, particularly those midway through a transaction.
“And if anything, a second lockdown is only likely to reaffirm the changed housing priorities among those with the financial security to be able to move.
“However, the practical implications of lockdown among estate agents, mortgage valuers and conveyancing solicitors may mean delays in getting some agreed sales through to completion before the end of the year, pushing more activity into 2021 and up against the deadline for the stamp duty holiday.
“The view of our research team is that this also means – despite the extension of the furlough scheme and mortgage holidays – it will be difficult to sustain the current momentum in the housing market through to the year end, especially at the lower end of the market. “That’s most likely to be reflected in a slowing rate of price growth and fewer new sales being agreed, even if reported transaction levels continue to rise given the backlog in agreed but uncompleted sales.
“Our researchers believe that March next year will be the key date for the market. At that point the stamp duty holiday is expected to end and unemployment is likely to peak, meaning all eyes will be on where we are in relation to finding a vaccine and what this means for people’s confidence in their household finances.”
Charlotte Grimshaw, head of mortgage sales at Ipswich Building Society, said: “At the start of the pandemic there was a halt in house buying as surveyors were unable to carry out physical valuations for mortgage lenders.
“While they were able to conduct some ‘desktop’ valuations, not being able to visit properties caused a big impact as mortgage lenders commonly require this independent valuation report to give an assurance that the purchase price and value is accurate, and that the property will provide adequate security for the loan being arranged.
“As the first national lockdown period eased the mortgage market was able to return to some sort of normality, albeit applicants with a smaller deposit or small amount of equity in their home soon found themselves with limited options when it comes to purchasing or even remortgaging – it is now common for borrowers to require a minimum 15% or even 20% deposit or equity, while pre-coronavirus as little as 5% was fairly normal.
“Now, with the second national lockdown phase coming into effect, it is encouraging that the housing secretary Robert Jenrick has confirmed the housing market will remain open. This should give assurance to those purchasing, or looking to purchase, a property in the near future.
“However, with the significant increase in house purchases in recent months this has put pressure on the associated activities including mortgage lending, valuations and searches, for example, which could lead to some processing delays.
“Anyone expecting to take advantage of the government’s Stamp Duty holiday, which sees residential properties exempt of the tax for the first £500,000 of the purchase price until the end of 31 March 2021, should be mindful of the timescales involved and it is advisable buyers set aside sufficient funds to pay Stamp Duty should their purchase complete on or after 1 April 2021.
“Another ongoing consequence of the pandemic is the large number of people who have found themselves experiencing financial difficulties or been made redundant. While the requirement for borrowers to prove both affordability and a stable income has not changed, a growing number of people will find their new circumstances will significantly impact their chances of arranging a new mortgage.
“Anyone considering purchasing or remortgaging a property in the near future would be best advised to make sure their finances are in order and there are no missed payments on any credit agreements – this includes credit cards, mobile phone contracts, insurance agreements and so on.
“They could also consider seeking out an independent mortgage broker, who will be an expert in navigating the often complex mortgage market and have a good knowledge about the best mortgage lender to suit their individual circumstances.”
Victoria Pollington, associate in Birkett’s Residential Property team, said: “The public will undoubtedly be nervous about how the latest government announcement will affect the buying and/or selling of property. At present the message is that the housing market will remain open during the latest lockdown, as confirmed on Twitter by the housing secretary Robert Jenrick, subject to the continued observation of current guidance.
“Conveyancers, estate agents, mortgage brokers and all others involved in the housing market will have learnt valuable lessons during the first lockdown and will be even better prepared to face the latest lockdown.”
Amanda Angel, legal director in Birketts residential property team, added: “Generally speaking we have been impressed with how the majority of our local councils have dealt with searches during the pandemic. There was undoubtedly a slight blip at the start of the national lockdown while we were all adjusting to remote working, however the bounce-back happened within a few weeks and turn-around times have been fairly reasonable ever since, with most searches coming back within ten working days.
“The longest turn-around times for councils in East Anglia are around 25 days. We have not seen any impact in relation to the other searches that we undertake.
“The best way to help your conveyancer is to provide your search fees promptly and have your identification and required proof of purchase funds documentation ready to hand over at the point of instruction. If your conveyancer asks you to approve the search plan, do review it carefully and provide a prompt response.”
“It is fair to say that we are experiencing a buoyant residential property market. Solicitors, estate agents, brokers, valuers, movers and everyone in between are exceptionally busy. Some of this activity is the backlog of transactions that stalled during national lockdown as well as pent up demand following lockdown.
“We are also seeing increased probate and matrimonial transfers as a direct result of the Covid-19 pandemic. People are also just wanting to future-proof their living arrangements having found their existing housing coming up short during national lockdown. Coupled with all of this activity we also have buyers who have been tempted to the marketplace early by the stamp duty land tax holiday.
“In terms of restrictions, while lockdown undoubtedly affected the housing market with a significant reduction in completions, the current restrictions and guidance are workable and are not having a significant impact.”
For more information about homes for sale in Suffolk, see our weekly property supplement, out every Thursday.