- 26th March 2020
- Posted by: Mark
- Category: Uncategorised
With the government having introduced mandatory social distancing and only allowing people to leave their homes for basic necessities home purchases are effectively on hold.
Many lenders have stopped physical valuations meaning the purchase cannot be completed. Some lenders are looking into different ways of valuating a property however this is not a priority. Lenders are putting their resources into dealing with all the applications from borrowers looking to take mortgage payment holidays.
Lloyds Banking Group have extended mortgage offers for 3 months to allow home purchases to go through when it is safe for valuations to be carried out.
It’s a difficult time for everyone and it will take time for lenders to set up systems to deal with the backlog of both applications for new mortgages and holiday payment breaks.
Home Purchases Are Effectively on Hold
Due to limited staffing numbers, safety of staff home purchases throughout the country are effectively on hold. It’s expected that it will take at least 3 months for existing mortgage offers to complete. The industry is working hard to find solutions that work but house sales will be static for the short term.
As the government lifts restrictions over time we will see a slow return to the processing of mortgage applications. Many lenders are withdrawing mortgage products at the moment due to staffing issues and likely to discourage people leaving their homes.
As we move past the worst of this pandemic the easing of existing restrictions will slowly lift. There is a fine balance between returning to normal while keeping the virus under control.
How Will I be Kept Informed if I have a Pending Home Purchase ?
Your mortgage broker or lender will let you know of any updates as and when they become available. Your broker will need to wait for updates from the lender before being able to pass these onto yourself.
We expect most lenders will effectively extend current mortgage offers for 3 months before re-evaluating whether an additional extension will be required.
Both buyers and sellers will be in difficult positions and from what we can see lenders are doing as much as they can to keep people. This takes time though, new systems are being introduced to try and ease the workload on the staff who are dealing with a deluge of enquiries from existing mortgage borrowers and those with mortgage offers looking to complete home purchases.