Buying and selling a home during the coronavirus lockdown?
Post updated: March 27th, 2020
Post updated: March 27th, 2020
Latest advice on moving during lockdown
The government last night (26th March) issued guidance saying they “urge parties involved in home moving to adapt and be flexible to alter their usual processes.”
While some news this morning suggests the housing market is being put on hold, the government advice is actually that, “There is no need to pull out of transactions, but we all need to ensure we are following guidance to stay at home and away from others at all times, including the specific measures for those who are presenting symptoms, self-isolating or shielding. Prioritising the health of individuals and the public must be the priority.”
Look for alternative dates
The government statement adds, “Where the property being moved into is vacant, then you can continue with this transaction although you should follow the guidance [see below] on home removals.”
But, “Where the property is currently occupied, we encourage all parties to do all they can to amicably agree alternative dates to move, for a time when it is likely that stay-at-home measures against coronavirus (COVID-19) will no longer be in place.”
This week there was increasing concern that moving house would put people in breach of new police powers, but the government has made clear that, “In the new emergency enforcement powers that the police have been given to respond to coronavirus, there is an exemption for critical home moves, in the event that a new date is unable to be agreed.” So if your chain cannot come to a new date for moving you can proceed.
Recognising parties will need to alter common practice, the government have sought to ease this process for all involved by:
- Issuing this guidance, developed with Public Health England, to home buyers and those involved in the selling and moving process;
- Agreeing with banks that mortgage offers should be extended where delay to completions takes place in order to prioritise safety; and,
- Working with Conveyancers to develop a standard legal process for moving completion dates.
What does this mean for my property move which is scheduled whilst the stay-at-home measures are in place?
- Home buyers and renters should, where possible, delay moving to a new house while measures are in place to fight coronavirus (COVID-19).
- Government 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.
- But – 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 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?
UK Finance have confirmed that all mortgage lenders are working to find ways to enable customers who have exchanged contracts to extend their mortgage offer for up to three months to enable them to move at a later date.
If a customer’s circumstances change during this three month period or the terms of the house purchase change significantly and continuing with the mortgage would cause house buyers to face financial hardship, the government say lenders will work with customers to help them manage their finances as a matter of urgency.
There will be people who have already committed to moving home; where possible the government are encouraging them to delay their move but a small number of moves may need to go ahead. The government are urging everyone to take all sensible precautions to ensure the move can happen safely.
- Removers should honour their existing commitments where it is clear that the move can be done safely for the client and your own staff and it is clear that the moving date cannot be moved.
- Removers should follow the latest Government guidance which currently (26 March 2020) states that work carried out in people’s homes can continue, provided the tradesperson is well and has no symptoms or coronavirus.
- It is important to ensure Government guidelines are followed, including maintaining a 2 metre distance from others, and washing their hands with soap and water often for at least 20 seconds (or using hand sanitiser gel if soap and water is not available).
- No work should be carried out by a person who has coronavirus symptoms, however mild.
If you’re thinking of starting on your journey to buy or sell a house, then don’t. Now is clearly not the time!
We’re in troubling times. So much can change in a few days. On Monday (16 March) Rightmove announced figures that show that up until very recently, the housing market was enjoying quite the spring bounce.
Average new seller asking prices hit a record high, and the number of sales agreed was up by 17.8%, with the highest number of transactions at this time of year since 2016, and average times to get to sales agreed speeding up.
So the chances are, a lot of people were in the midst of a house sale or purchase when the pandemic was declared last week, when the stock markets started to plummet and events started to be cancelled. If you’re hoping to complete on your transaction in the next few days or weeks, here’s what to watch out for.
Expect more to be done digitally
Throughout property transactions, physical documents such as Land Registry forms, reports and contracts are changed hands numerous times. You can expect all parties involved to move to a more secure digital document transfer system, email and document sharing platforms. So expect to receive your documentation by email or online rather than hard copies in the post.
Make sure password protection is used and avoid possible security breaches by speaking to the person to whom you are sending documents – and especially money – before you press send. Electronic signatures are valid under English law to execute or sign documents, so don’t be concerned if your conveyancer opts for this.
See our guide on property fraud for more details.
Specific delays you may encounter
Given these uncertain times, it will not be unexpected for some buyers or sellers to get “cold feet” – if you sense that this could be the case in your transaction, it’s worth speaking to your conveyancer about your concerns so that no one’s time – or money – is wasted.
In order to make sure your sale or purchase does happen, the key thing is to get through to exchange (when parties are contractually bound and the deposit is paid) and completion (the day the balance of the payment is made and ownership changes hands).
If completion does not take place after contracts have been exchanged due to COVID-19, then your conveyancer will need to look at the contract provisions about breach and advise whether a seller failing to complete can be compelled to do so – and whether, in the case of a buyer failing to complete, the seller can keep the deposit and additional costs.
In reality, if the failure to complete is due to illness or self isolation, we would hope that the parties would all work together to come to a reasonable agreement regarding delay.
If the transaction forms part of a chain of transactions, it may not be possible to take such a view without incurring a penalty.
Speak to your conveyancing solicitor
These are unprecedented times. Get your conveyancer’s view on your transaction and try to act in a way that is fair to everyone, especially if you’re in a chain. Everyone is facing the same issues so remember to be considerate, accommodating and sympathetic where you can.
Booking your remover
The British Association of Removers’s advice is crystal clear – that all moves should be cancelled or postponed for the next 3 weeks. If you cannot delay your move and you cannot find a removal firm willing to take the work on, you could rent a van and enlist friends to help, as long as you follow the social distancing guidelines.
On moving day
We’ve had lots of nervous buyers contact us at HomeOwners Alliance. One suggestion for moving day which might help put you at ease is getting a deep clean of the property once it has been vacated. To find a cleaner near you, simply type “cleaning services” in the tool below.
And check out our moving day checklist so you don’t miss a trick.
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