With the country on lockdown, it’s essential that you understand your options as a borrower or when moving home.
In this guide, we’ll try to give you the answers you need. Keep reading for a summary of the latest government rules for moving home, information on coronavirus and mortgage payment holidays and responses to your COVID-19 mortgage FAQs.
If you’re left with unanswered questions, call us on 0330 433 2927 or simply send us an enquiry.
COVID-19 Government Advice for Moving Home
The government has stated that you can still move home during this latest lockdown (05/01/21) but that people outside your household or support bubble shouldn’t help you physically move unless it’s absolutely necessary.
They’ve also said you can still view properties if you’re looking to move and that estate agents, letting agents and removal firms can keep working.
The government have stated that you should follow the current national guidance on moving home safely.
We’ve provided a summary of the government’s advice below. You can find the full guidelines on the GOV website.
COVID-19 Guidelines for Physical Viewings
You can physically visit a property you’re thinking about buying for a viewing and/or have people physically visit and view a property you’re selling. Here’s what you need to know as a buyer and/or a seller.
Advice for Buyers
- Unless you’re exempt, you should wear a suitable face covering when viewing a property or visiting an agent’s office. Exemptions should be confirmed with the agent before arrival
- You should do initial viewings virtually – property agents should be able to help you do this
- You’ll need to make an appointment to view a property
- Only physically view properties you’re serious about potentially making an offer on
- Physical viewings should be limited to members of the same household
- Only those who must view the property should go
- Agents are expected to accompany clients when viewing a property
- Avoid touching surfaces
- Wash your hands regularly where hand washing facilities are available and/or use hand sanitiser
- If you must take young children with you, try to stop them from touching surfaces and make sure they wash their hands regularly
Advice for Sellers
- You can put your property on the market
- Open house viewings shouldn’t take place
- Estate agents can visit the property to take photos/videos
- Open all internal doors before the viewing and keep them open during
- Allow access to handwashing facilities
- Provide separate towels/paper towels for people viewing your property where possible and clean/dispose of these safely after each viewing
- Clean surfaces – including door handles – after each viewing with household cleaning products
- Vacate your property when people are viewing it
And lastly, everyone must maintain social distancing in line with public health advice.
If you’re really worried, speak to your landlord or estate agent so they can put extra safety measures in place.
Note: in-person visits from estate agents and physical viewings should be delayed if any member of the household taking viewings, or any member of the household viewing properties, is showing coronavirus symptoms or is self-isolating.
COVID-19 Guidelines for Valuations and Surveys
Surveyors can continue to carry out surveys/valuations for buyers/lenders. We’ve listed a few of the main things the government advise for surveyors and property owners, below.
Advice for Surveyors and Property Owners
- There are no restrictions on the types of survey that a surveyor can carry out
- Only one surveyor should visit the property at a time
- Surveyors shouldn’t enter a property if a member of that household is showing coronavirus symptoms or is self-isolating
- Inspections should ideally take place by appointment
- Surveyors should follow government guidance for professionals working in other people’s homes
- Property owners should allow the surveyor access to every part of the property they need to inspect where possible
- Property owners must try to minimise contact with the surveyor – e.g. by waiting in a different room while they carry out their inspection
And finally, everyone must follow social distancing rules.
COVID-19 Guidelines for Removals
You can move home and hire a removals company to help you. We’ve summarised the government’s advice, below.
Advice for Households
- Contact removal firms as far ahead of the move as possible
- Try and pack as much as you can by yourselves
- If removal firms are unavailable, you may ask another household to help you move your belongings, but you must follow social distancing guidelines and hygiene measures where possible
- If you’re using a removal firm, you may ask them for advice prior to the move – e.g. how to pack fragile items
- Clean your belongings with standard household cleaner where possible before they’re handled by anyone outside of your household
- Make sure all internal doors are open while removers are in your home
- Wash your hands and/or use hand sanitiser regularly and avoid touching surfaces unnecessarily
- Give the removers access to handwashing facilities
- Provide separate towels/paper towels for the removers if you can and wash/dispose of these safely after use
- Don’t provide refreshments for the removers
Advice for Removal Firms
- Contact the household before the move to make sure that no one is showing coronavirus symptoms or is self-isolating. If they are, then the move should be delayed
- Encourage the household to open all internal doors before entering the property
- Encourage the household to clean surfaces and possessions with household cleaning products prior to entering the property
- No employees can assist with a move if they have coronavirus symptoms
- Wash your hands upon entering the property
- Use separate towels/paper towels and ensure these are washed/disposed of afterwards
- Limit contact with the property owners where possible, following social distancing guidelines
- Use a buddy system where the same 2 people continue to move heavier furniture together
- Use separate towels/paper towels
- Bring your own refreshments
And once more, follow social distancing guidelines as much as you can. Property owners/members of the household and removers should try to keep 2 metres apart.
Coronavirus Mortgage Payment Holidays
Mortgage lenders will currently allow payment holidays of up to 6 months. The deadline to apply for a payment holiday is 31/03/21.
What Are Mortgage Payment Holidays?
Payment holidays aren’t exactly new. In fact, they’ve been a feature offered by a number of mortgage lenders for some time. They typically allow you – as the borrower - to take a short break of 1 - 3 months from your mortgage payments. Lenders will only allow you to take this break if you meet certain criteria.
Currently, mortgage lenders have announced payment holidays of up to a maximum of 6 months, and will have discretion on how to treat borrowers who request a payment holiday and the circumstances under which to offer one.
To find out whether a payment holiday is an option for you, you simply need to contact your lender and ask if you can utilise this feature. In some cases, your lender may only offer a payment holiday if you’re unable to pay your mortgage in the short term. Whatever their policy, we recommend you ask your lender some questions like these so you can find out about the potential implications you could face - we’ll go into this in more detail below.
If you're facing financial difficulties as a result of COVID-19 and are granted a payment holiday, your credit rating won't be affected. However, if you take the payment holiday for the maximum 6 month period but need to extend it, then the lender can record these extra months as missed payments which would affect your credit score. Therefore it’s really important that you ask the lender how they’ll record a payment holiday extension before agreeing to a payment holiday in the first place.
How Does a Mortgage Payment Holiday Work?
A payment holiday means that you don't have to make your normal monthly payments for a certain period of time - in this case up to 6 months. Although you don't make some payments, your lender will add those payments onto your mortgage balance until you recommence paying. This means that the lender will charge interest not only on your outstanding balance as normal, but the missed payments as well unless you pay them off later when you have a bit more cash. Essentially, your cash flow is eased whilst you have a payment holiday, however you end up paying more interest overall.
Why Might a Payment Holiday Be Rejected by a Lender?
There are many reasons why a lender might reject your application for a payment holiday, including:
- Some lenders might only offer a payment holiday to the borrowers they perceive to really need one
- You may have already fallen behind on your mortgage payments which won’t necessarily exclude you from applying for a payment holiday, but your lender may decide that a different course of action is necessary. Communication with your lender is vitally important in these circumstances
- You may have just remortgaged with a new lender who requires that you make a certain number of payments before allowing you to take a payment holiday
What Are the Alternatives to Payment Holidays?
There are some alternatives to payment holidays that you might want to consider depending on what your lender can facilitate. It’s worth seeking independent advice before you make a decision:
A few lenders and mortgages have an underpayment feature which allows you to reduce your monthly mortgage by a set amount. Your proposed monthly payment should usually cover the interest on your mortgage as a minimum. Underpayments can help if you’re able to make a partial payment on your mortgage but can’t afford the whole thing. They’re more cost-effective than a payment holiday, as you still pay a bit towards your mortgage each month. You’ll need to agree on an underpayment strategy with your lender, regardless of whether it’s already a feature. This option might not affect your credit rating but it is well worth asking if it will be recorded negatively on your credit file.
In extreme cases, a lender may allow you to switch to an interest-only mortgage part way through your mortgage term. You could also consider remortgaging with a new lender on an interest-only basis, but obviously you must meet their criteria for this to be possible. It’s worth noting that, whilst this might alleviate some financial pressure in the short term, you would need to provide evidence of how you would repay the mortgage balance in the future, otherwise you could find yourself facing a much bigger problem further down the line. It’s important to seek advice on this as it’s a rather big decision with long-lasting ramifications.
Extending the Mortgage Term
Another - often preferable - option is to reconsider the length of time over which you repay your mortgage. You can sometimes alter your mortgage term with your existing lender or you can simply remortgage. It’s more likely you’ll be able to extend your term if you remortgage. Extending your mortgage term can help to significantly reduce your monthly payments. What’s more, most mortgages allow you to make overpayments therefore you could increase your monthly payments when you find yourself in a better financial situation. This could help you save interest and lessen the negative effects of having increased your loan term.
Remortgaging to a Lower Rate of Interest
Arguably the most obvious option is to remortgage to a lower rate of interest, but many borrowers don’t consider this while they’re still in their fixed rate period. This is often because you’ll face ERCs (early repayment charges) if you remortgage before your introductory rate ends. However, as rates are currently very low, you may find that you’re able to lower your monthly payments and reduce the amount of interest you have to pay by enough that it’s worthwhile.
What Questions Should I Ask My Lender if I Want to Take a Payment Holiday?
Communication with your lender is essential right now, as is knowing the right questions to ask if you’re having issues or are likely to have issues paying your mortgage.
Here are some of the main questions to ask your lender:
- Will this payment holiday have a negative impact on my credit rating?
- How much will my monthly payments increase by following the payment holiday?
- Will my overall term be extended or my final end date changed as a result?
- How much additional interest will be charged over the term of my mortgage as a result of taking a payment holiday?
- Are there any fees involved in taking a payment holiday?
- Will I need to set up a new direct debit mandate?
- When is my current mortgage product due to end?
- Will this payment holiday affect my ability to take out a new product with you?
COVID-19 Mortgage FAQs
Can I Still Buy a Property?
People are still able to buy properties, either by purchasing them outright or by taking out mortgages. If your financial situation has changed since you first started looking into purchasing a property, speak to a mortgage broker about your next steps. Call us on 0330 433 2114.
Can I Still Move Home?
The government has officially said that people can move home during this third lockdown (05/01/21). There’s clear advice on what everyone can do to try and keep safe when viewing properties, carrying out valuations and moving belongings.
How Is the Homebuying Process Now Different?
The government are introducing new practices to keep as many people as safe as possible whilst moving home.
These new practices include but are not limited to:
- Washing hands more regularly
- Maintaining social distancing when viewing properties
- Conducting more of your initial viewings online
- Staying in a different room from the surveyor while they carry out their inspection
- Cleaning your belongings before they’re handled by removers, where possible
- Cleaning door handles and keeping internal doors open for viewings, valuations and when removers are in your home
See our summary of the government’s advice for viewings, valuations and removals above or visit the GOV website for the full guidelines.
Can I Visit a Property for a Viewing?
You can still visit a property for a viewing in the UK.
However, these viewings must follow government guidelines and are only allowed if neither the estate agent, nor anyone in your household nor the seller’s household have coronavirus symptoms or are self-isolating. You also shouldn’t view a property unless you’re serious about potentially making an offer.
The government also recommend that you do as much of your research online as you can. This includes partaking in virtual viewings to help narrow down your options.
Can I Buy a Property Without Viewing It?
You can buy a property without physically viewing it and just doing virtual viewings.
How Are Properties Being Valued in Lockdown?
The government have announced that surveyors can physically visit properties to carry out valuations and surveys – subject to certain rules and guidelines. You can view these above.
Can I Trust a Non-Physical Valuation?
Firstly, non-physical valuations are no longer the only option. The government has said that surveyors can carry out physical valuations for lenders and even surveys for borrowers – as long as surveyors and households follow government guidelines.
Secondly, non-physical valuations are for the lender – not the borrower – and they aren’t anything new. Lenders have been using non-physical valuation methods for a while, particularly as part of a remortgage process. It’s just that they became our only option at one point during the lockdown. They’ve proven a successful solution for many lenders.
See our guide for more information on types of house valuations and surveys.
Are Removal Companies Operating?
Removals companies are allowed to operate which means you can hire them to help you move into your new property, but you should contact them as far ahead of your move as possible.
Should I Wait to Buy a Property?
If you want to qualify for the Stamp Duty holiday your transaction needs to complete by 31/03/21.
Speak to one of our advisers on 0330 433 2114 if you’re not sure about your current options.
Can I Remortgage?
It’s still very much possible to remortgage your property, it’s not really that different from normal as you don’t need to view properties, the lender will often only require a non-physical valuation and you don’t need to move home.
See our best buy tool for the latest remortgage rates on the market.
Should I Remortgage Now?
If you’re up to 6 months away from the end of your current rate, you should already be considering remortgaging. It’s arguably even more important now if you’re concerned about how your income might change in the coming months as remortgaging can help reduce and stabilize your monthly payments.
Am I Able to Make Home Improvements, Given Social Distancing Measures?
The government has said that people can have work carried out on their properties. Tradespeople should follow government guidance to help ensure the safety of employees and homeowners.
Can I Secure a Mortgage on a Property I Can’t Move into?
You can secure a mortgage on a property you might not be able to move into just yet. If a surveyor can value the property and the lender can produce the mortgage offer then it’s down to the solicitors to complete the transaction – regardless of whether you need to wait to move in. Most mortgage offers are valid for at least 3 months, so check when it’s due to expire and try to get things completed before then. Once you own the property you can move in whenever you want, but you must let your buildings and contents insurers know when you do plan on moving in.
I Was Planning on Moving Home but I've Put That on Hold - What Should I Do?
If you’re delaying your plans to move home and are coming to the end of your current mortgage deal, you may want to remortgage to a new deal with no ERCs. This could reduce your monthly mortgage payments whilst you decide when and how best to proceed with your home move. There are a number of mortgages available that can be either redeemed penalty-free at any time or ported to a new property when you do move.
If you want some more information, call us on 0330 433 2114 or simply send us an enquiry.
I Want to Buy My New Home but Can’t Sell My Current Property. What Can I Do?
You may be a candidate for let to buy, which is where you remortgage your existing home onto a buy-to-let basis, releasing equity from it at the same time that you can put towards a deposit on your new property.
How Long Will My Decision in Principle Last?
A DIP (Decision in Principle) is typically valid for up to 30 days.
Can I Get a Tenant Now?
It’s still possible to go about getting a tenant or tenants for a property. This includes moves into HMOs (houses of multiple occupation) and student accommodation. You and/or the estate agent should make sure the property is prepared and ready for new tenants, which may include cleaning in line with government advice. Everyone must also follow government guidelines when viewing a property.
It’s a good idea to make sure you have the means to cover any expenses or payments for a few months should it take longer than normal to get a tenant.
What Should I Do if I’m Unsure About My Options?
Speak to an independent, qualified mortgage adviser. The initial discussion should be free and they’ll be able to guide you through your options, making a recommendation based on your circumstances and current and future needs.
Call us on 0330 433 2114 or send us an enquiry for more information.
If you want some more information, call us on 0330 433 2927 or simply send us an enquiry.