Property UK: How does the latest lockdown affect movers and mortgages in England?
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Fortunately, guidance from both the government and key industry bodies has been swiftly published over the weekend. The Financial Conduct Authority (FCA) confirmed yesterday morning that, having been in dialogue with both regulators and HM Treasury, the current Mortgage Payment Deferral scheme will be extended as of today.
This means borrowers who have not as yet applied for permission to defer their mortgage payments can do so for up to six months.
Eric Leenders, Managing Director of Personal Finance at UK Finance commented: “Lenders are providing unprecedented levels of support to help customers through the Covid-19 crisis and stand ready to deliver ongoing assistance to those in need.
“The industry is working closely with the Financial Conduct Authority to ensure customers impacted by the new lockdown measures will be able to access the most appropriate support.”
The FCA have advised borrowers who want to apply for a mortgage payment deferral agreement should wait until they are contacted by their lender, a process that will be completed in the coming days.
Mark Harris, chief executive of mortgage broker SPF Private Clients said: “It’s good to see such decisive action taken so quickly. Many borrowers will be worrying about paying their mortgage and extending payment deferrals for a further six months will provide them with some comfort.”
Mark went on to caution: “However, the advice remains the same; only ask for a payment deferral if you need one.
“Interest will still rack up and you will have more to pay off in the long run so the option should only be utilised by those who really need it.”
That’s also because, apart from having to repay the mortgage payments missed while taking a payment holiday, while the FCA have said that taking a deferral won’t have a negative impact on borrower credit ratings, this isn’t the only way that lenders assess affordability.
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If you’ve applied for a mortgage payment holiday in the past, you will need to disclose this in the future to your new lender, which could affect your application.
If you’re not moving in the near future but will need to remortgage in the next six months or so, again be aware of applying for a mortgage payment deferral unless you absolutely need to do so.
If you do take a mortgage payment holiday, in the vast majority of cases you’ll need to repay the amount you’ve deferred in full before you can move to a different lender.
For those who are currently in the midst of the moving process, there were fears that the new lockdown would mean their plans could be delayed.
However, the Housing Secretary Robert Jenrick confirmed late on Saturday evening that estate and letting agents in England will continue to operate during the new lockdown period, providing they adhere to Covid-secure regulation.
In a tweet on Saturday, Mr Jenrick said: “Yes – the housing market will remain open throughout this period. Everyone should continue to play their part in reducing the spread of the virus by following the current guidance.”
The official government guidance on moving home was first published in March and was then updated in August, but still applies to the lockdown measures in England from this Thursday.
This encourages prospective buyers to take advantage of ‘virtual viewings’ offered by many agents as an alternative to physical viewings in the first instance, and to only visit properties once they have whittled down a shortlist.
The guidance also stipulates: “Members of the public who are visiting an agent’s office or viewing a property should wear a suitable face covering as described in government guidance unless they are exempt from this requirement. This should be confirmed with the agent before arrival.
“Anyone with concerns should contact the agent in advance of their visit to discuss appropriate measures. The agent may require you to arrange an appointment before visiting the premises.”
Sellers are encouraged to vacate their homes for viewings, having followed the government guidance around preparing a property for every viewing by cleaning all floors, hard surfaces and door handles and opening all internal doors and cupboards prior to the agent and prospective buyers visiting the property.
Open house viewings, a popular method used by many estate agents to encourage multiple vendors to visit the same property on the same day, should not take place in England until after the new lockdown measures are lifted, potentially on 2nd December.
For those who are due to move home over the next month the government guidelines state: “When moving between properties, you and those in your household should try to do as much of the packing yourself as you can. Where this is not possible, you should speak to removal firms in advance.
“If you are particularly worried about the risk of infection, then speak to your landlord, estate agent or removers as they may be able to put extra precautionary measures in place.”
You can read the full current government guidance on home moving here.
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