Coronavirus and residential property — your questions answered
COVID-19 has affected so many parts of our lives, it’s no surprise that the residential property sector’s impacted too.
Here, our experts answer your buying, selling, mortgage and renting queries.
Buying and selling
Can I still make an offer for a property/can I accept an offer on my property for sale?
Yes. You can still make and receive offers for property, but you will need to be flexible about when you move. Any entry date will need to be in line with the current ‘stay at home’ restrictions being lifted. It’s also worth bearing in mind the time taken to conclude the contract may take longer than normal.
Can I conduct viewings if my property’s for sale?
No. While the 'social distancing' and 'stay at home' restrictions are in place, you shouldn’t invite visitors into your home, and you should avoid carrying out any viewings. You can continue to market your property, but for the meantime, it is recommended you make a note of interested parties’ names and contact details so you can pick things up with them when restrictions have been lifted.
I have a concluded contract for my property purchase with an imminent entry date — will I still be able to move?
Only in exceptional circumstances.
The Health Protection (Coronavirus) (Restrictions) (Scotland) Regulations 2020 have now come into force. These must be read in conjunction with the Scottish Government Coronavirus (Covid-19): guidance on moving home. It is recommended that while the 'stay at home' restrictions are in place, house moves should be put on hold and the parties should aim to reschedule entry dates. Moves should only go ahead when it is reasonably necessary to do so, where the move can be completed safely, the property is empty or can also be safely vacated.
Your solicitor will be able to advise you on the latest developments.
I've heard the Land Register is closed, if I don't move, I am likely to be homeless. What can I do?
The Land Register of Scotland has put interim measures in place so a limited number of property transactions can go ahead, specifically those where if they didn’t, the result would be extreme adverse consequences or hardship.
Your solicitor will need to ensure there is the prior registration of an Advance Notice at the Land Register and agreement from your mortgage lender before proceeding, and they’ll confirm when they have all the required paperwork and consents to allow your transaction to go ahead.
You must take steps to make sure your move is carried out as safely as possible and take care to maintain social distancing requirements, including minimising the number of people involved in your move. Plus, it’s worth bearing in mind many removal firms may not be operating at this time.
I have not yet agreed an entry date for my property transaction — what should I do?
It is important that you do not agree to an entry date that falls within the current 'stay at home' restrictions timeframe. Plus, bearing in mind these restrictions could be extended, when discussing things with your solicitor, it’s important that any future entry date agreed to within the contract can be deferred further if required.
Coronavirus means I’ll struggle to pay my mortgage, can I apply for a payment holiday?
Yes, you can.
You will be entitled to a mortgage payment holiday if you have been impacted by COVID-19 and are up to date with your mortgage payments and are not in any arrears.
A mortgage payment holiday is a period of time where your lender agrees to defer your mortgage payments. During this time the interest due on your mortgage is simply added to the balance. As part of the package to support borrowers who have been financially impacted by COVID-19 all lenders have been asked by the government to implement a special three-month payment holiday.
To apply, first of all speak to your financial adviser to discuss your options. As a mortgage payment holiday is a deferred period with interest still being added to your loan, if you have not yet been financially impacted or are able to pay, it is likely your best option is to continue to pay your mortgage as normal.
You may have to apply to your lender directly for a mortgage payment holiday. Some lenders will require you to call them and some will have set up online application forms.
The process should look something like this —
- The customer contacts the lender and informs them they are impacted by COVID-19
- The lender accepts these details from the customer and offers an automatic three-month mortgage payment holiday
- No evidence will be sought from the customer
Will my credit rating be affected if I apply?
No, as long as you have applied for the mortgage payment holiday with your lender and it has been formally granted your credit rating or credit score will not be affected.
This is only for the granted mortgage payment holiday – as you’d expect, any other missed or late payments would negatively impact your credit rating, as normal.
Is it possible to transfer or switch on to a new deal whilst on mortgage payment holiday?
Most lenders will allow you to switch to another deal with them if your current fixed rate mortgage deal ends while you’re on a payment holiday, but please note each lender has different criteria surrounding this and you are always best to contact your mortgage advisor for clarification. Policies are changing almost daily.
If you’re looking to move to another lender it’s a little more complex, but it is possible.
Each lender has its own lending policy on remortgages at the moment and it depends on various factors for example —
- Current loan to value (e.g. max loan to value can be 80% for one lender and 75% for another)
- Type of property
- Location of the property
Can an automated valuation or desk top valuation be carried out?
As mentioned before, individual lenders policies are changing almost daily, so please contact your mortgage advisor for more information.
Please bear in mind too, outwith any arranged mortgage holidays, if you encounter any difficulties making your monthly payments, please contact your lender straight away to explore possible solutions. As a last resort, your home may be repossessed if you do not keep up with your monthly payments.
Tenant and landlord queries
I’m looking to rent a property, can I still go and view one?
No, unfortunately that would be deemed a non-essential journey, and viewings cannot be conducted at the moment.
I’m a tenant and can’t afford my rent, what can I do?
If you can’t pay rent, in the first instance, we’d encourage you to find out what support may be available, such as Universal Credit. If not, or if any support doesn’t cover the cost of renting, you should raise a request to your agent or landlord for rental relief.
Landlords are not obliged to offer rental relief; however, are encouraged to offer a full or partial deferral of the rent due. The timeframe of the deferral and the repayment of the unpaid rental is something for you and the landlord to agree.
My tenants are unable to pay their rent. Can I serve them with notice to leave?
You can, but bear in mind the Scottish Government has asked landlords not to evict tenants facing financial hardship because of the coronavirus pandemic.
If your tenant is in rent arrears over three consecutive months, you can give them notice to leave, but there is a specific process that has to be followed, including how much notice you give, and notice periods have changed. Full details are available on the government’s website.
Under the Coronavirus (Scotland) Act, as of 7 April 2020, all grounds for eviction will be on a discretionary basis.
This means that, if the tenant doesn’t voluntarily vacate the property on the termination date and you, as the landlord, have to apply for an eviction order to the first tier tribunal, the tribunal may decide to exercise a reasonableness test in deciding whether to evict the tenant or not.
The decision will consider whether the tenant’s need or right to occupy the property is outweighed by the landlord’s need or right to repossess it. The first-tier tribunal will not be hearing cases until at least 28 May 2020.
As a landlord, am I still responsible for ensuring that legislative works are kept up-to-date and that repairs are being carried out?
Essential repairs should be carried out, but all routine certification requirements and non-essential work should be rescheduled until as soon as possible post-lockdown with one exception: gas safety certificate renewals.
The UK Government is encouraging these to be carried out as normal, on the basis tenants are not suffering from any COVID-19 symptoms and are happy to grant an engineer access.
Additional safety measures should be taken by everyone during the visit, including the use of PPE and two metre distancing.
For any non-legislative works, on the basis they are essential for ensuring the safety of the tenants continuing to live in the property, the landlord or agent should arrange for these works to be carried out.
It’s worth bearing in mind that, because of COVID-19, there are fewer contractors working and fewer resources available to them so delays should be anticipated.