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Lenders extend mortgage offers by three months

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  • 27/03/2020
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Lenders extend mortgage offers by three months
Mortgage lenders will extend offers for borrowers who have already exchanged contracts by up to three months to help those impacted by Covid-19 and allow them to move at a later date.

 

The move comes as the industry has been significantly affected by the restrictions imposed as part of the coronavirus pandemic, including no in-person valuations or solicitors witnessing contracts.

Lenders have already quizzed the government about shutting down the housing market, after communities secretary Robert Jenrick tweeted that moves should be delayed wherever possible.

Lloyds Banking Group, the UK’s biggest lender, had already announced it would be extending offers by three months as part of its mitigation efforts earlier this week.

 

‘Achieve sensible outcome’

The wider extension was announced as a joint statement by trade bodies UK Finance and the Building Societies Association (BSA).

They noted that if borrowers’ financial circumstances were hit during the extension period, or if the terms of the purchase changed, they would work closely with the borrower to “achieve a sensible outcome”.

UK Finance chief executive Stephen Jones said lenders recognised that many people looking to move into their new home were facing significant stress and uncertainty due to the impacts of coronavirus, with social distancing measures meaning many house moves would need to be delayed.

“It is clearly not appropriate for people shielding or self-isolating to move home,” he said.

“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.”

BSA chief executive Robin Fieth echoed these sentiments and acknowledged the enormity of the situation.

“Lenders and borrowers face an unprecedented set of circumstances,” he said.

“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.”

 

Leeds BS

Leeds Building Society was one of the first lenders to respond to the announcement.

It confirmed that offers, which are six months as standard, would be extended to nine months where exchange of contracts has taken place.

Chief customer officer Jaedon Green said this would help borrowers who expected to complete their home purchase in the near future.

“In line with other lenders, we’re working hard to minimise disruption and inconvenience to our customers at what is a challenging time for everyone,” he said.

“Home moves are recognised as potentially stressful under normal circumstances, so we’re doing all we can to support our customers and intermediary partners.”

The mutual added that applicants whose offer expires after 30 April do not need to get in touch at this stage.

 

 

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