March 26, 2020 7:28:43 PM
Home movers will be given the option to extend their mortgage offer for up to three months – enabling them to move at a later date, lenders have said.
The initiative will be open to customers impacted by Covid-19 who have exchanged contracts.
Stephen Jones, chief executive of UK Finance, said: “Lenders recognise that many people looking to move into their new home are facing significant stress and uncertainty due to the impacts of coronavirus.
“Current social distancing measures mean many house moves will need to be delayed.
“It is clearly not appropriate for people shielding or self-isolating to move home. Therefore where chains contain people in these groups, lenders, conveyancers and other professionals are working together to enable these customers’ moves to be delayed.
“Where people have already exchanged contracts for house purchases and set dates for completion this is likely to be particularly stressful.
“To support these customers at this time, all mortgage lenders are working to find ways to enable customers who have exchanged contracts to extend their mortgage offer for up to three months to enable them to move at a later date.”
He said if a customer’s circumstances change during the three-month period or the terms of the house purchase change significantly and continuing with the mortgage would cause house buyers to face financial hardship, lenders will work with customers to help them manage their finances as a matter of urgency.
Robin Fieth, chief executive of the Building Societies Association (BSA), said: “Lenders and borrowers face an unprecedented set of circumstances. People who would have been preparing and expecting to move house in the coming weeks now face a wait until Covid-19 restrictions can be lifted.
“Our hearts go out to them and our heads are clear that it would be unfair for these people to have to start their mortgage application all over again once life returns to a more normal state.
“A three-month extension of existing mortgage offers seems a fair and reasonable step to take.
“It is possible that some borrowers financial circumstances may change during the three months. If this happens, or the terms of the purchase change we will work closely with the borrower to achieve a sensible outcome.”