Can you buy a new home during the pandemic? Are mortgage lenders still accepting applications?
Our panel of housing experts have answered your burning questions about buying and selling a home during the coronavirus pandemic! Read their responses or watch the whole Q&A video below!
Can I still reserve an Erris Home?
Nick: Yes, you can still reserve an Erris Home during lockdown! We’ve taken several reservations across our Yorkshire developments since lockdown was implemented. All you need is a £500 reservation fee and we can do everything via phone and email. It will then be a case of setting up appointments once things return to normal to complete the reservation checklist.
Nick: Exchanges and completions have also been taking place; we’ve just undertaken our first legal completion at our Rosemeade development in Huddersfield, so it’s evident that during this time we’re still carrying on, taking reservations, exchanges and even completions.
How can I view an Erris Home?
Nick: Earlier this year, we opened our Bramham show home at our Rosemeade development in Huddersfield. It is currently closed, but as soon as it is safe to reopen, we will make the public aware so they can book an appointment to view the show home in person. In the meantime, we do have lots of content on our website and social media channels such as walk-through tours of show homes as well as images so people can see the style and finish of our fixtures and fittings.
Can I still get a mortgage on a new-build home?
Jason: There are a number of mortgage providers still operating on the current marketplace who are also providing automatic desktop valuations. For example, Nationwide and Bank of Ireland are currently offering a desktop valuation process which simply means they don’t need to visit the site. They will ask the developer for the details of their property and the Council of Mortgage Lenders’ paperwork coupled together with their knowledge of the local area. As long as they’ve been to the development within the last 12 weeks, they will then be able to offer a valuation.
Can I still get a mortgage if I’ve been furloughed?
Jason: If you have been furloughed, you can still get a mortgage! There are a number of providers out there who will still allow the lending to happen, but obviously you’re capped at £2,500 a month or £30,000 per annum. At the moment, these lenders aren’t taking into account overtime, bonuses or commission, and will look solely at your basic salary. This still provides us with a number of mortgage providers that will still allow the lending that you require at the rate that you need it. Similarly, other lenders are looking at mortgage offers that are in place and making sure that these can still be lent at the same amount of money as they were applied for.
Are people still making offers on homes?
Paul: Certainly, this is the case. We have achieved five sales throughout April where people have viewed the property previously, and we’ve managed to negotiate these sales and instruct solicitors. If customers haven’t previously viewed a property, contracts can be started but completion will not happen now until the lockdown is lifted.*
*Please note this only applies to secondhand properties. Erris Homes are still undertaking completions at this time.
How will lockdown affect property prices?
Paul: Without a doubt, there will be some effect on property prices but this will largely depend on how long the lockdown is in place and how long the furlough agreements will last as this will undoubtedly impact unemployment. The property market was fairly good prior to the lockdown and the demand is still fairly active even during this period – we’ve actually been quite busy with customers wanting to view properties once the lockdown is lifted. The signs are encouraging that there could be a reasonably good bounce-back.
Jason: The unknown is how the lockdown is going to affect values and would it be wise to wait? Certainly over the last couple of weeks the demand for new-build homes has started to increase again, and with that becomes a good marketplace for clients to buy. I can also see that at the end of lockdown, many clients will have spent a long time in their current properties and will have reached the point of deciding it is time to move. I believe demand will then be a lot higher for properties and this will potentially reduce the amount of offers available of potentially increase the prices. I would say now is a really good time to buy a property.
A tour of the Bramham show home is available on our YouTube channel
Can I sell a property during lockdown?
Paul: You can market a property, but to undertake viewings would be against government guidelines. We have completed some property sales in recent weeks, but these have been cases where negotiations were ongoing, and the property was vacant so there has been no personal interaction between customers.
What is the Bank of England base rate and what does this mean for mortgage rates?
At the start of lockdown, the Bank of England reduced its base rate twice. It’s currently sitting at 0.10%, which is the lowest it has been for quite some time. This is fantastic for everyone who has a base-rate tracker as they would have seen their monthly payments reduce, and then reduce again. At this moment in time fixed rates, already really cheap, have not reduced down any further. They are monitored and maintained by a different way of funding.
Are Erris Homes still building?
Nick: Yes, our developments have carried on building during lockdown. We are making sure that we’re following government guidelines and ensuring our contractors are working at a safe distance from one another.
I’ve reserved an Erris Home – how do I customise my plot?
Nick: During this time we have been doing everything possible via email and phone, such as electrical changes. Where build dictates, we have been arranging appointments with customers to complete choices for their kitchens and tiling in the sales office, keeping a safe distance and providing plenty of hand sanitiser.
How can I apply for a mortgage during lockdown?
Jason: As new-build mortgage brokers, we’re very used to dealing with clients over the telephone or over in internet. In fact, very few of our clients these days would find the need to see our brokers face to face. We operate a safe a secure back-office system where documents can be uploaded and fully encrypted to ensure we have them safe and secure.
My team of advisors will then call the client at a time that’s most suitable to them and run through all the details that they need to apply for a mortgage.
I bought my current home using Help to Buy – can I still sell it during lockdown?
Jason: If you currently have the Government Help to Buy scheme on your current property, yes you can still move. Just last week, the Royal Institute of Chartered Surveyors (RCIS) approved the use of desktop valuations to be used for the repayment of the Help to Buy existing loans. This means that Target, who currently maintain the repayment process of a client’s existing Help to Buy, would be able to run through all the paperwork with clients, ensuring that the valuations are done, and the rest of the paperwork is completed. This means that the seamless process can continue.
Will Help to Buy for existing homeowners be extended past 2021?
Jason: Currently, there are rules in place that until the end of 2020, and the very latest April 2021, second-time buyers can use the Help to Buy scheme. This was put in place at the very start of 2020 to enable the gradual phase-out of the current Help to Buy scheme so that in future only first-time buyers will be able to use it, up to a regional cap, and indeed this is due to be phased out in 2023. However, based on the current COVID situation, the Housing Builders’ Federation (HBF) and Homes England are currently in discussions with the government over whether or not this scheme should be continued [for second-time buyers]. In my opinion, the ability to extend the current Help to Buy terms would be the most sensible approach.
When will Erris Homes release new homes for sale?
Nick: We are planning to release more plots for sale at our Rosemeade development in Huddersfield in the near future. This will include brand new house types which haven’t previously been for sale, so keep your eyes on our social media channels and sign up to our mailing list on our website!
Has lockdown made you realise you've outgrown your current home? Take a look at our new homes developments in Yorkshire and let Erris help you find your dream home. Our sales offices and show home are currently closed, but we're still available to help on our website and via email: firstname.lastname@example.org.