UK tells people not to move as housing market freezes
LONDON (Reuters) – The UK government has urged people to avoid relocating during the coronavirus outbreak as the pandemic puts the country’s real estate market at a standstill.
In guidelines released Thursday night, the government said “there is no need to opt out of transactions, we all need to make sure we are following the guidelines to stay home and away from others at all times.”
The outbreak has restricted the ability of banks to offer new mortgages, while many have been inundated with inquiries from people asking for breaks on their existing home loans.
In line with government advice, UK lenders agreed on Thursday to give all homebuyers the option of extending mortgage offers for three months.
UK Finance, the banking industry body, said banks would give homebuyers who have traded contracts the option to move out at a later date by extending their mortgage offer for up to three months.
“Lenders recognize that many people looking to move into their new homes face significant stress and uncertainty due to the impacts of the coronavirus,” said Stephen Jones, the head of UK finance. “Current social distancing measures mean that many moves will have to be delayed. “
Banks have also been urged to help customers “deal with their finances on an urgent basis” as homebuyers could face financial hardship during the three-month extension due to the spread of the virus.
“It is possible that the financial situation of some borrowers will change over the course of the three months. If this happens or if the terms of the purchase change, we will work closely with the borrower to achieve a reasonable result, ”said Robin Fieth, Managing Director of the Building Societies Association (BSA).
While deterring new buyers, the pandemic is making it increasingly difficult to complete transactions as it is nearly impossible for banks to conduct investigations and complete other paperwork during a nationwide foreclosure ordered by Prime Minister Boris Johnson Monday.
The banks had discussions with the government on the issue on Thursday.
A source with direct knowledge of the talks said talks between ministers and lenders focused on providing extensions and flexibility if people couldn’t immediately complete their home purchase, rather than shutting down. completely the market.
“We want the housing market to stay open and people to transact,” the source said, adding that the priority was to support homebuyers facing the disruption of the coronavirus.
Additional reporting by Juby Babu and Kanishka Singh in Bengaluru and Rachel Armstrong in London; Editing by Timothy Heritage and Stephen Coates