What can you do while the housing market is on ice?
Ruth Jackson-Kirby answers a few pressing questions about the current situation in the housing market.
Spring may have sprung, but “the traditional ‘spring selling season’ in the housing market has been all but forgotten”, reports James Pickford in the Financial Times.
The Covid-19 lockdown means estate agents, prospective buyers and surveyors are all barred from visiting properties “bringing the homebuying process very largely to a halt across the UK”.
So, what can you still do? Here we answer a few pressing questions about the current situation in the housing market.
Are all transactions banned?
The government has said that anyone wanting to move house should “delay the transaction where possible while the ‘stay-at-home’ measures are in place,” says Pickford.
It is impossible to carry out physical viewings or surveys during the lockdown, but you can instruct agents, solicitors and apply for a mortgage so you are ready when restrictions are lifted. If you are buying or selling a vacant property and no move is involved, then the transaction can go ahead.
Can I cancel a purchase?
You can walk away before you have exchanged contracts (note that the rules in Scotland are different) but after that you have legally committed to a purchase. The government suggests that where contracts have been exchanged, completion should be postponed until lockdown ends. If you have a mortgage offer that will expire before you can complete, then speak to your lender. Many are offering a three-month extension to stop housing deals collapsing.
How will the freeze affect house prices?
“More than £30,000 will be wiped off the average value of a UK home by the coronavirus crisis,” says Tom Rees in The Daily Telegraph. That’s from the Centre for Economics and Business Research (CEBR), which expects prices to fall by 13% by the end of 2020. That “would push the average house price to around £200,000”.
What could be done to help the property market?
The Royal Institution of Chartered Surveyors (Rics) thinks that government intervention will be needed to revive the housing market once the coronavirus crisis has passed. “Rics is not an organisation that would call for a stamp duty holiday on a whim,” Hew Edgar, head of government relations at Rics, told The Guardian. “As we start to emerge from this crisis, however, it is likely that the finances of potential home- buyers will be under strain… A stamp duty holiday could be one of the ways to reactivate the housing market quickly as a short-term measure.”