Last updated on:
November 4, 2020
The government has confirmed the English property market will remain open and ready for business throughout the wider November lockdown.
What are the rules and how do they affect you and your mortgage plans?
Let's take a look.
Housing Secretary Robert Jenrick has confirmed throughout the November 5th to December 2nd lockdown duration, property viewings will continue as normal.
This means all the same rules around viewings continue to apply.
The estate agent will take care of this, but, to summarise, the current government advice is:
The government is keen to keep the English housing market moving – it's one of the key pillars of the UK economy, hence the introduction of a Stamp Duty holiday that thousands of people have already taken advantage of.
It means you can still make an offer on any house you wish.
If you already have a completion date set for November, you can carry on working towards it.
Equally, if you do start the house buying process now, you do not need to wait until December to move (providing you can get all the conveyancing done in time).
There is a bigger risk of moves being delayed now, though.
This is as a result of people in your chain potentially needing to self-isolate rather than the lockdown itself. You should check with your solicitor if they have taken necessary measures to help make sure your contracts and agreements are flexible enough to accommodate this risk.
As carefully and as safe as possible!
The government suggests you try to do it yourself, but recognises that many people may need to use 3rd party removal firms:
"You and your household should also try and do as much of the packing yourself as possible. However, where you are using a removals firm, you may wish to get their advice on packing in advance, in particular the arrangements for packing fragile items.
We ask that, where possible, you clean your belongings with standard domestic cleaning products before they are handled by others, including removal firms."
Again, before the removal firm comes to your home, you should open all internal doors and maintain a distance of at least 2 metres apart once they arrive.
It's true the first lockdown saw a lot of lenders pull 95% LTV mortgages from the market. These were favourites among FTBs who had to save a deposit to get on the housing ladder. Bank of England data shows over 1,000 fewer deals were available than at the start of the year in the 90%+ LTV bracket.
Despite the lack of choice, mortgage approval rates continue to be high – they hit 91,500 in September 2020, the most since 2007.
When it comes to getting a mortgage as a first-time buyer in lockdown, as ever your chances are largely dependent on your own personal circumstances, your eligibility and your affordability.
The bigger deposit the better because not only will you have more choice, but you will also unlock lower rates and better deals. That said, many building societies and even major high-street lenders such as Barclays are still offering 90% mortgages.
Part of the problem many homebuyers experienced in the last lockdown was a real bottleneck during the valuation process. As you know, a mortgage lender needs to independently value your property so they feel happy to lend on it.
Lockdown in April and May made this process very difficult, but in November, the property surveying industry has received confirmation from the Ministry of Housing, Communities & Local Government that they can continue their work.
Finally as a first-time buyer in England you may want to use the current Help to Buy scheme, but it's worth bearing in mind that currently it's set to end in April next year – one month after the Stamp Duty holiday.
A new Help to Buy: Equity Loan scheme will kick off to first-time buyers only from 1 April 2021 to 31 March 2023. Find out more about Help to Buy 2021-2023 here.
Back in March, the Bank of England lowered the UK's base rate of interest to 0.1% – the lowest rate ever. The mortgage rates banks and lenders offer borrowers are based on the base rate.
It means that in historical terms mortgage deals are cheap.
Moneyfacts.co.uk records the current 2-year all-LTV average rate to be 2.38% (0.05% lower than in March), while the 5-year all-LTV average rate is 2.62% 0.12% (lower than March).
Even if they had no plans to move, we found many people used the first lockdown to review their finances.
Because mortgages are your biggest financial commitment it can literally pay to get it right, and remortgaging is your best chance to do that and potentially save thousands of pounds a year.
If you're about to slide on to your lender's standard variable rate (SVR), which could be as many as 1 or 2 percentage points higher than what you are currently paying, we can help you check the market to find the remortgage deal that saves you the most this November.
Lockdown has little impact on remortgaging activity, so as soon as you start searching, the sooner you can potentially save.
If you're unsure whether you can remortgage right now or aren't certain that the potential savings could be justified because of early repayment charges to your current lender, let us know. We can help you find your best remortgaging option.
It may be that the best option is simply remortgaging with your current lender, moving away from the SVR in a process known as a product transfer. We can help you do that – and give you the peace of mind of knowing the deal you're switching to for at least the next 2 years is competitive. Nobody wants to be paying over the odds at a time like this.
Of course, the Prime Minister has already confirmed that construction work can continue as normal, so if you were planning on remortgaging for home improvements, nothing has changed.
Mortgage payment holidays were put in place at the start of the first lockdown. They allowed people to defer pay their mortgage payments if they had been financially affected by coronavirus measures.
They had originally been due end this month, but have now been extended for a further 6 months.
That means if you have not yet had a mortgage holiday you can ask your lender to pause your repayments.
You will still accrue interest on your mortgage debt during this time, so your mortgage payments may increase once the holiday is over.
The other thing to know is the maximum limit for a mortgage payment remains 6 months, so, even with this new extension, if you have already paused mortgage payments for 6 months, you need to start repaying.
If you have reached this 6-month limit and still think you'll struggle to make payments, next month or beyond, the FCA advises you to speak to your lender about a tailored support plan.
House prices have been robust so far in 2020.
According to the Nationwide House Price Index, annual growth increased to 5.8% in the year to October 2020. This was driven by a huge 5.0% growth in September 2020 – with many commentators attributing this to the Stamp Duty holidays.
Beyond the Stamp Duty holiday it is hard to predict what will happen to house prices. Most people buy a home for the lifestyle it brings to them and their loved ones, it is somewhat of an emotional purchase, but there is no doubt that it has financial implications.
Talking about the latest house price growth figures, Jeremy Leaf, a former RICS residential chairman, said: “Looking forward, we don’t expect huge change until it is almost impossible to take advantage of the concession, unless of course the scheme is extended or replaced with further help for first-time buyers, such as the promised government-backed higher loan-to-value [LTV] mortgages.”