CORONAVIRUS Q&A
The Telegraph’s property correspondent Melissa Lawford was joined by Thea Carroll, a buying agent, and Andrew Boast, a conveyancer, to answer your questions on buying and selling property during the pandemic
Q I am close to completing. Should I try to switch my mortgage from a two-year fixed to a tracker?
A Changing the terms of your mortgage may mean you need to submit a new application. Certain mortgage products have been pulled in their entirety. You may not meet with some of the mortgage lender’s new criteria. By looking to change your mortgage product, you may then miss the opportunity to complete on the property with your existing offer.
You should speak to your bank or mortgage broker directly to see if they’ll agree to move you on to a new mortgage term without any disruption to the transaction. (Andrew)
Q I read a forecast that prices could drop by 20 per cent, is this true?
A I think this figure is too high. A popular theory at the moment is a “V-shape” recovery, which means that there could be a recovery by Apriljune 2021 according to Oxford Economics. Second to that is the supply/demand balance and low interest rate mortgages. There is still a pent-up demand and this will only grow over the next three to six months for those who need to move. (Thea)
Coronavirus has hit at a time when, though the market was starting to recover, prices had been gradually declining relative to inflation. Many of the deals that were agreed before the outbreak already involved significant discounts. It is a good sign that the market was nowhere near as volatile as it was before previous crashes. (Melissa)
Q We are currently ready to exchange on a house purchase (£460,000). We are concerned that the prices will fall and want to know whether we should renegotiate?
A How much of a long-term view do you have for your purchase? Savills is forecasting a 5 to 10 per cent drop in house prices, but this is only for the short-term. Research firm Capital Economics forecast that the market will return to growth in 2021. (Melissa)
Tread carefully. Are you prepared to lose the transaction altogether? Not all vendors will take kindly to rampant opportunism, so consider the temperament of the vendor, the discount (if any) you have already secured and the fees incurred to date before asking the question. (Thea)
Q We have exchanged contracts and are due to move on April 14. Where do we stand legally and what are our options?
A The legal position is you are both contractually bound to complete on the day of completion, regardless of coronavirus. Some ideas that might help: 1. Stay in contact with the chain. 2. Send completion money to your solicitor as soon as possible. Beware of fraud and never use emailed bank details. 3. Ask your mortgage broker to report any changes to your mortgage lender immediately. (Andrew)