The UK housing market has been frozen - here's what to do if you're buying, selling or trying to rent
The UK housing market has been put on a temporary freeze, with the public asked to delay moving into new homes to avoid spreading coronavirus.
The new guidance, published by the government last night (26 Mar), applies to anyone buying or selling private residential homes which they intend to live in, as well as renters planning to move.
It urges parties involved with buying and selling to "adapt and be flexible" when it comes to purchasing or selling homes during the period of lockdown.
The move has effectively frozen the UK housing market, with the public asked to delay moving into new homes to avoid breaking social distancing rules.
What is the advice to anyone planning to move during the coronavirus crisis?
The government advice to members of the public who were planning to move is as follows:
- Home buyers and renters should, where possible, delay moving to a new house while measures are in place to fight coronavirus (Covid-19)
- Our advice is that if you have already exchanged contracts and the property is currently occupied, then all parties should work together to agree a delay or another way to resolve this matter
- If moving is unavoidable for contractual reasons and the parties are unable to reach an agreement to delay, people must follow advice on staying away from others in order to minimise the spread of the virus
- In line with government’s advice, anyone with symptoms, self-isolating or shielding from the virus should follow medical advice, which will mean not moving house for the time being, if at all possible. All parties should prioritise agreeing amicable arrangements to change move dates for individuals in this group, or where someone in a chain is in this group
What if an extension goes beyond the terms of a mortgage agreement?
The government has said that UK Finance will support customers who have already exchanged contracts for house purchases and set dates for completion. All mortgage lenders are currently working to enable customers who have exchanged contracts to extend their mortgage offer for up to three months, allowing them to move on a different date.
Lenders will also work with any customers whose circumstances change significantly enough that continuing with the mortgage would put them in financial hardship, helping them with their finances as a matter of urgency.
What if I want to put my home on the market?
The government says that putting your home on the market may be challenging during the coronavirus outbreak.
The current guidance stresses that, while you can continue to advertise your home, there should be no visitors coming to view it in person. You may want to consider virtual viewings instead.
The guidance says it's fine to speak to estate agents over the phone to get advice about the local property market as well as other matters that can be handled remotely.
Their guidance for those wanting to sell is as follows:
- If you are thinking about selling, you can use this time to start gathering together all of the information you will need to provide to potential purchasers
- Advice for people to stay at home and away from others means you should not invite unnecessary visitors into your home, including Property Agents to carry out a market appraisal or take internal photographs prior to marketing your home, and Energy Performance Certificate assessors
How does accepting an offer work during the crisis?
The government has said that buying and selling should continue as normal, but that buyers and sellers should be aware the process might take longer than usual.
The exact guidance is as follows:
- You are free to continue to accept offers on your property, however the selling process may take longer
- Advice for people to stay at home and away from others means you should not invite visitors into your home, including prospective buyers or advisors
What happens after contracts have been exchanged?
As usual, once you have exchanged contracts, you've entered into a legal agreement to purchase that home. The government guidance for what to do next is as follows:
- If the property you are purchasing is unoccupied you can continue with the transaction
- If the property you are purchasing is currently occupied, we recommend that all parties should work to either delay the exchange of contracts until after the period where stay-at-home measures to fight coronavirus (Covid-19) are in place, or include explicit contractual provisions to take account of the risks presented by the virus