The Covid mortgage makeover: Crisis means more delays but low rates


Borrowers applying for a mortgage should brace themselves for delays and demands for additional paperwork.

Banks and building societies have introduced a raft of new checks in response to the Covid-19 crisis to ensure homebuyers’ finances are stable.

Experts say you should now expect more questions about your employment status, with some lenders insisting borrowers provide a letter from their employer confirming their job and salary are secure. 

Banks and building societies have introduced a raft of new checks in response to the Covid-19 crisis to ensure homebuyers’ finances are stable

Those who are self-employed will need to be able to prove their business can survive.

Many lenders have also clamped down on including overtime and bonuses when working out how much customers can borrow.

Here, Money Mail walks you through what to expect when applying for a mortgage post Covid-19 . . .

All-time low mortgage rates

The good news for borrowers is that mortgage rates are at an all-time low.

The average two-year fix is now just 2.02 per cent, down from 2.43 per cent on March 1, according to Moneyfacts. 

Switch to a top deal and save £197 a month

Homeowners with a typical £150,000 mortgage taken over 25 years could save £197 a month by switching to a two-year deal.

The average standard variable rate, which borrowers are moved on to at the end of their deal, is currently 4.51 per cent.

Even just by switching to the average two-year rate that is currently available — which is 2.02 per cent — could save you £4,728 over two years, according to the money comparison website Moneyfacts.

Borrowers who move to the average five-year deal could save £179 per month — or £10,740 over five years.

But be careful about switching before any fixed-rate term expires as you could face hefty exit fees. Typically, borrowers can start shopping around three months before their deal ends. Offers can last up to six months.

And the average five-year deal has fallen from 2.74 per cent to 2.26 per cent. On a typical £150,000 repayment mortgage taken over 25 years, this works out at £637 and £656 a month respectively.

The lowest two-year and five-year fixed rates are both for remortgage customers with a 40 per cent deposit. 

TSB is offering a two-year fix at 1.09 per cent, with a £1,495 fee. Nationwide is offering a five-year fix at 1.34 per cent, with a £1,499 fee.

The fall in average rates is partly down to lenders pulling loans for borrowers with small deposits. 

There are currently just six two-year and nine five-year deals available for those with a 5 per cent deposit, down from 137 and 142 at the beginning of March.

Experts hope lenders will begin to re-introduce more 95 per cent mortgage options as the market settles and house prices stabilise.

Good news on remortgaging 

If you are remortgaging, you may find lenders are not as strict — particularly if you are sticking with your current provider.

For example, Virgin Money says existing customers who are not borrowing more do not need to provide bank statements if they are self-employed and can still use bonus income when they remortgage with the bank.

Having a mortgage payment holiday should not affect your ability to switch to a cheaper rate if your current deal is expiring.

But David Hollingworth, of mortgage broker L&C, says: ‘If you’ve taken a mortgage holiday because you’ve been hit hard by the pandemic, then your financial situation could restrict your options when it comes to switching to a new lender.’

Be prepared to wait a while 

New applicants should prepare for delays as lenders work through a backlog of valuations they could not carry out during lockdown.

Most major banks and building societies are now carrying out physical valuations in England again. 

But in Scotland and Wales, social distancing rules mean lenders can still conduct only remote valuations, where they use information such as recent selling prices for similar properties.

However, if firms are worried about prices, or homebuyers have small deposits, borrowers may have to wait for a physical valuation. 

John Baguley, tangible assets valuation director at the Royal Institution of Chartered Surveyors (RICS), says: ‘It will take lenders time to recover from lockdown. A substantial backlog exists and it will take weeks, perhaps months, to work through.’

New applicants should prepare for delays as lenders work through a backlog of valuations they could not carry out during lockdown

New applicants should prepare for delays as lenders work through a backlog of valuations they could not carry out during lockdown

Expect more questions 

Most lenders will now ask borrowers if their income or employment has been affected by Covid-19. 

This may include questions about whether you or your partner have been furloughed or had a pay cut, even if only temporary.

TSB, for example, has a Coronavirus Income Impact Form (CIIF), while Barclays, is asking borrowers to sign a ‘material change attestation’ form which says they must inform the lender if their circumstances change after receiving a mortgage offer.

Most banks and building societies will still lend to those who have been furloughed. Some want employers to confirm the date of return to work, or if the employee will return on full pay — which could cause hold-ups if businesses cannot yet answer for certain.

Jane King, mortgage adviser at financial planning and advisory service Ash-Ridge, says: ‘If the lender is demanding more paperwork from employers this can delay applications, especially if letters have been sent to an office which is closed.’

If you have received a pay cut, how much you can borrow will typically be based on your current income rather than what it used to be.

The self-employed will almost certainly be asked for more evidence their finances are in good shape, with many more lenders asking for three months’ worth of bank statements.

Borrowers may also be asked if they have claimed a grant using the Government’s Self-Employment Income Support Scheme.

Dominik Lipnicki, of Your Mortgage Decisions, says: ‘Lenders will not just be thinking about whether you have survived this wave financially, but whether you could survive another one.’

You can’t count on extra income

Borrowers who receive bonuses, commission or overtime may find they can no longer borrow as much as before the crisis.

Nationwide, Coventry Building Society and Virgin Money all included bonuses when calculating how much someone could borrow, but will now take into account only your base salary.

Barclays has reduced how much it will include, from 50 per cent of an applicant’s average bonus to 25 per cent.

When it comes to overtime, experts say it may depend on the industry you work in. For example, if you a waiter or bartender, it is unlikely you will be able to include overtime you did before lockdown. 

However, doctors and nurses may find they can include the extra hours they are working.

Brokers have said that, unofficially, some lenders have reduced how much they will lend in general. 

Andrew Montlake of mortgage brokers Coreco, says: ‘In some cases, where you might have been able to borrow five times the value of your salary, that may now be four-and-a-quarter times.’

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House prices suffer biggest drop since February 2009, says Nationwide


The average house price across the UK suffered its biggest drop for more than 11 years in May, a leading index revealed today – with one leading estate agent calling the numbers a ‘car crash’.

In May, the average cost of a home fell by 1.7 per cent month-on-month, marking the sharpest decline since the depths of the financial crisis in February 2009.

Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors, said: ‘The extent of the car crash that hit the property market in May is laid bare in Nationwide’s report of the largest monthly fall in house prices for over 11 years.’ 

Lucy Pendleton at independent estate agents James Pendleton said that the jolt in house prices was probably caused by ‘those vendors most keen to sell and willing to negotiate on price to get things moving quickly’. 

Falling: In May, the average cost of a home in Britain fell to £218,902, which is just over £4,000 less than the £222,915 figure seen in April

‘A wave of gazundering has hit the market in the past fortnight but these buyers have been left feeling a little deflated,’ she added. ‘The vast majority of those who thought they would grab a bargain post-lockdown haven’t.’

She said that since the property market re-opened nearly 80 per cent of buyers who had already agreed purchases before lockdown tried to reduce their price, adding: ‘Most succeeded but not on the scale they were expecting.’ 

‘The weight of the attack on sale prices agreed before lockdown has caught us a little by surprise but it’s still very early days and prices are showing a great deal of resilience,’ she concluded. 

Mr Leaf added: ‘Uncertainty remains as to the direction of travel for values in some price ranges and locations until momentum begins to build again. The market feels a bit like returning after the Christmas/new year break, with buyers and sellers waiting to see who will blink first as prices establish their post-Covid level.’

While some estate agents think the property market looks set to bounce back quickly with pent-up demand from buyers coming to the fore, experts at the EY Item Club think property prices will fall by around 5 per cent in the next few months. 

The average cost of a home in Britain fell to £218,902 last month, which was just over £4,000 less than the £222,915 figure seen in April.

On an annual basis, average property prices increased by 1.8 per cent in the year to May, slowing from 3.7 per cent in the year to April.

Mortgage payment holiday extended

This morning, the Financial Conduct Authority has announced that the deadline for mortgage payment holiday applications had been extended by three months until 31 October. 

Christopher Woolard, Interim Chief Executive at the FCA, said: ‘The measures we have confirmed today will mean anyone who needs to can get help from their lender, if they are still struggling to pay their mortgage due to coronavirus.

‘It is important that if a consumer can afford to re-start mortgage payments, it is in their best interests to do so. Customers should talk to their firm about the best option available for them.’

Lenders will have communicate with customers regarding what happens when their payment holiday ends. 

‘They should offer a range of options for how the missed payments will be repaid, if they are able to resume payments’, the FCA said.

The housing market came to a standstill at the end of March, when Prime Minister Boris Johnson ordered moves and viewings to be halted and estate agents to close their doors.

Estimates from Zoopla suggest around 450,000 property transactions in the buying and letting markets were put on ice as a result of lockdown. 

Vital: The importance of a garden has come to the forefront in recent months

Vital: The importance of a garden has come to the forefront in recent months

Improvements: Adding space inside the home has become even more desirable

Improvements: Adding space inside the home has become even more desirable

On 12 May, the housing market in England was given the green light to reopen after seven weeks in lockdown.

Robert Jenrick, the communities secretary, said removal companies, conveyancing experts and estate agents could restart their businesses with immediate effect. 

Buyers, renters, sellers and estate agents are having to take extra precautions, including keeping two metres apart during viewings.

Many estate agents are also ramping up the number of online virtual house tour videos they create, but it remains to be seen how many online viewings turn into sales. 

Before Covid-19 took its toll, the housing market was ‘steadily gathering momentum’, according to Robert Gardner, Nationwide’s chief economist. 

Activity levels and price growth were ‘edging up’ as a result of a relatively strong labour market, a ‘more stable’ political backdrop and cheap mortgage deals, Mr Gardner said. 

But, as a result of lockdown, activity in the property market ‘slowed sharply’, he added. Recent figures from HM Revenue & Customs suggest that residential property transactions were down 53 per cent in April compared with the same month a year ago.

Lockdown also appears to have prompted people to rethink their property priorities, with a garden becoming a must-have.

Mr Gardner said: ‘Behavioural changes and social distancing are likely to impact the flow of housing transactions for some time. 

‘Our recent market research survey suggested that c12% of the population had put off moving as a result of the lockdown. 

‘Most viewed the current situation as a temporary pause in the market, with would-be buyers now planning to wait six months on average before looking to enter the market.

‘Peoples’ housing preferences may also be impacted. Indeed, c15% of people surveyed said they were considering moving as a result of life in lockdown, with a third (34%) stating they think differently about their home as result of the Covid-19 outbreak, especially the importance of a garden and the need for more indoor space.

‘Moreover, 22% of people said they had changed their mind as to what constituted the most important aspects of a home and are considering improving their home as a result of Covid-19.’

Looking ahead, Mr Gardner said the outlook for the sector remained ‘highly uncertain’, and would largely depend on how the wider economy fares.

But, the availability of even cheaper mortgage deals and Government measures like the Job Retention Scheme, should, Mr Gardner thinks, ‘set the stage for a rebound’ for both the economy and the housing market.

Samuel Tombs, an economist with Pantheon Macroeconomics, said May’s month-on-month house price drop represented the start of a slide in house prices over the rest of this year.

Mr Tombs said: ‘The huge size of the blow from COVID-19 to households’ incomes and the deterioration in consumers’ confidence suggests that house prices must drop.’

He added: ‘We look for a 5% decline in prices by the end of the third quarter.’       

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Will I lose my deposit if I back out of a new-build home purchase?


I bought an off-plan flat in Battersea two years ago but so far have only paid a deposit. 

As property prices are expected to fall as a result of the coronavirus I do not want to complete the transaction and buy the property. 

But if I back out now can I still get my 10 per cent deposit back?

If the developer suffers a loss on the re-sale of the property, it can claim damages for that loss

Sarah Davidson, of This is Money, replies: This is a situation that many people who have agreed to buy homes are facing at the moment.  

A Royal Institution of Chartered Surveyors report said that 80 per cent of its member agents had seen buyers and sellers pull out of property deals during lockdown.

Yet while those buying ‘second hand’ homes are not financially committed to the purchase until they exchange contracts, people purchasing new-build properties will often have paid a deposit that they could forfeit.

In the current climate it’s no surprise that buyers are concerned and Rics member estate agents said they expected house prices and sales to fall in the months to come.

Some 40 per cent said they expected property values in the newly-reopened market down by at least 4 per cent.

At the same time, more than 8 million people have been put on furlough, with many more worried about the security of their future income.  

It’s understandable that you’d be feeling reluctant to commit yourself to the purchase of a brand new flat with all this going on around you. 

However, a contract with a developer is still a contract, and you’ll find it hard to back out without taking a financial hit. 

In fact, it’s to prevent buyers from pulling out in circumstances such as these that developers require a deposit from you and a contract to be signed up front. 

If you choose to back out now, there may also be additional financial consequences. 

We asked a specialist solicitor to review your case to give you a clearer idea of your rights and responsibilities.   

Kellie Jones, partner at law firm Boodle Hatfield, says: Unfortunately, if you back out of the sale now, you are very likely to lose your 10 per cent deposit. 

Kellie Jones, Boodle Hatfield

Kellie Jones, Boodle Hatfield

Assuming the flat is ready and the developer has notified you of a completion date, if you do not complete the purchase on the completion date, the developer can choose to serve you a formal notice to complete. 

This makes time of the essence and gives you 10 working days to complete the purchase. 

If completion does not take place within that time, then the developer may choose to rescind the contract. If it does so, it can also choose to keep the deposit paid plus any interest accrued.

There is a further risk in a falling property market. 

If the developer suffers a loss on the re-sale of the property, it can claim damages for that loss, plus any costs incurred, from you. This is a risk if property values fall more than the 10 per cent covered by the deposit.

The developer may choose not to rescind the contract and try to force you to purchase in any event. 

A claim can be made for specific performance of the contract, to try to force you to go ahead with the purchase but this is only likely to arise if the developer is certain that you have funds available to purchase the property.

Also the flat was meant to be finished by the end of last month but because of coronavirus it has been delayed – will that let you back out of the contract and keep the deposit?

It will depend on the wording of the contract. Has the longstop date for completion passed? 

Or, does the contract allow for development overruns? 

Contracts for off-plan purchases usually allow for delays and it is only when the longstop date has passed that you might have a remedy. 

If the longstop date for completion has passed and you are ready, willing and able to complete the purchase, you could serve your own notice to complete, giving the developer 10 working days to complete the purchase. 

If the developer does not do so, you may rescind the contract and claim back the deposit with accrued interest.

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Down valuations: Surveyors are likely to undervalue after coronavirus


Mortgage lenders are slowly reopening their doors to new applications and estate agents report that buyer interest has surged following the relaxation of lockdown rules two weeks ago. 

Property listing site Rightmove said it had its ‘busiest ever day’ on Wednesday, surpassing six million visits for the first time and up 18 per cent on the same day in May last year.

According to the site, the number of sales being agreed by agents is slowly starting to pick up but they warn it will take time for things to recover meaningfully. And other property industry insiders say that, while the recent flurry of activity is promising, the housing market is struggling to emerge from its period of stasis. 

Why? Because nobody knows how to value homes accurately in the aftermath of the coronavirus pandemic and social lockdown. 

Estate agents report that buyer interest has surged following the relaxation of lockdown rules 

How coronavirus affected the housing market  

Homeowners were told by Government not to move house and surveyors were unable to conduct physical property inspections and valuations due to the social lockdown guidance imposed on 23 March. 

It triggered an almost complete closure of the property market overnight. Even where moves could be delayed, sales stalled or collapsed as lenders wereunable to assess risk for new mortgage applications.

Particularly for more expensive homes, new build and specialist buy-to-let properties, the majority of lenders refused to accept automated valuations made using a combination of housing market data and checked by a local surveyor.  

Is the housing market now open for business? 

On 12 May Government confirmed that surveyors and estate agents could go back to work and homeowners could move house again so long as strict social distancing measures are followed.   

HSBC began confirming valuation bookings within hours of the Government safety guidance on how to conduct physical property inspections emerging. 

Nationwide told mortgage brokers a day later that it planned to contact applicants to arrange their mortgage valuation by 29 May and hoped to have cleared its backlog by 12 June. 

Skipton Building Society, Halifax and Santander began to rebook valuations on paused applications the same week, and major valuations firms L&G Surveying Services and Connells Survey & Valuation also confirmed plans to restart physical valuations imminently.

Consequently, over the past fortnight many lenders have relaxed criteria on their mortgage deals with several reinstating loans to those with a 10 per cent deposit or equity, which were shelved when the crisis hit. 

Virgin Money, Clydesdale Bank and the Co-operative Bank have all raised their maximum loan-to-values to 90 per cent and Coventry Building Society confirmed it will recommence offering mortgages for those with a 15 per cent deposit or equity to put in.

Yorkshire Building Society increased the maximum property value for residential lending from £1million to £2million on residential purchase mortgages.

Halifax reported that mortgage application calls were up more than a third in the week following the Government’s announcement.

Meanwhile lenders that suspended all new lending in March, are now open again for new business. Specialist buy-to-let lenders Bluestone Mortgages, Fleet Mortgages and Foundation Homeloans have all returned to lending in the past two weeks.   

These moves all point in the right direction for a recovery in the housing market and look set to enable home moves to get going again in the near future. 

But transaction numbers from HMRC have fallen off a cliff. There were just 46,440 residential property transactions in April 2020 with the provisional seasonally adjusted estimate 53.4 per cent lower than April 2019 and 46.1 per cent lower than March 2020.

There were just 46,440 residential property transactions in April 2020

There were just 46,440 residential property transactions in April 2020

Given that property transactions typically take around three months from an offer being accepted to the contract exchanging and completing the sale, there is always a lag in the official numbers. 

Transactions completing in April would most likely have begun in February, before the fallout from Coronavirus really took hold. 

However, it’s clear from the dramatic fall in completions that lockdown forced around half of all home sales in progress to stall in March and April. Much of that will have been down to valuers’ inability to conduct physical property inspections and thus provide accurate mortgage valuations. 

The lag means we won’t know what is happening in today’s housing market for another two or three months at least – possibly longer given the backlog of stalled transactions. 

Will house prices fall? 

What happens to house prices over the next few months is anyone’s guess. Buying agent Henry Pryor puts his finger on the problem.

Knight Frank forecasts that UK prices will fall by 3% this year and bounce back by 5% in 2021: Some forecasts have suggested average house prices could plummet by 30%

Knight Frank forecasts that UK prices will fall by 3% this year and bounce back by 5% in 2021: Some forecasts have suggested average house prices could plummet by 30%

‘The market has only been open for two weeks so it’s far too early to know where prices are,’ he said. 

‘Asking prices have opened where they were in March but we won’t know where sale prices are until late July by the time the post-Covid deals that have been agreed exchange contract, complete and are then recorded by the Land Registry. 

‘In the meantime expect estate agents to suggest that it’s business as usual and buying agents like me to cough in a non-covid way when they do.’ 

Knight Frank forecasts that UK prices will fall by 3 per cent this year and bounce back by 5 per cent in 2021. Savills is of the view prices will drop between 5 and 10 per cent this year before bouncing back next year, depending on how badly the economy is hit. 

Some analysts have suggested average house prices could plummet by up to 30 per cent – which might not be far-fetched in some areas and for some property types which fell by this or more in the aftermath of the credit crisis. 

Chancellor of the Exchequer Rishi Sunak has warned Britain is facing a recession 'the likes of which we haven't seen'

Chancellor of the Exchequer Rishi Sunak has warned Britain is facing a recession ‘the likes of which we haven’t seen’

Pryor believes some sellers will dig their heels in and demand February prices for their properties and the best may well got them. 

‘Most buyers will feel that they are taking a risk and will want a discount to recognise that,’ he adds. 

‘Whilst many will hope for 20 per cent off the asking price, most I suspect will settle for 5 to 10 per cent. Whether this will be enough come Christmas is anyone’s guess.’ 

The real elephant in the room is how many people lose their jobs when the Government’s furlough scheme comes to a close later this year.

It is feared as many as two million Britons could find themselves out of work when the £10bn-a-month furlough scheme ends in October, after being ramped down in the preceding months. 

Mass redundancies will lead to a sharp rise in people falling behind on their mortgage payments. A flood of repossessions and consequent property firesales is a scenario that the regulator and Government will want to avoid if at all possible. 

However, there will come a point for many households when it is better to sell their home and find something cheaper rather than struggle or fall behind with mortgage payments. 

Along with rising trade tensions between the US and China and the virus pandemic only just beginning to hit emerging economies, the global outlook is wildly unpredictable. While the stock market has recovered strongly since its March lows, there are still fears that any fresh bad news could send it crashing again. 

Brexit negotiations and the UK’s withdrawal from the European Union notwithstanding, the Chancellor of the Exchequer Rishi Sunak has warned Britain is facing a recession ‘the likes of which we haven’t seen’. 

How are properties being valued post-coronavirus? 

For the housing market to get back up and running properly, home valuations are fundamental

For the housing market to get back up and running properly, home valuations are fundamental

For the housing market to get back up and running properly, home valuations are fundamental. Mortgage lenders rely on them to assess how much risk they are taking on when approving a mortgage application or remortgage request. 

Speaking anecdotally, valuers say lenders remain deeply worried at how accurate valuations can be without comparable sales prices available for a post-coronavirus housing market. It is new territory.

So concerned are banks and building societies on this point that the Bank of England was prompted to issue guidance this week on how and when to value properties that underlie mortgage loans on lenders’ balance sheets. 

A statement from the Prudential Regulation Authority revealed the regulator has received a number of questions from firms in relation to valuations. 

It said: ‘In particular, given the recent disruption in the property market caused by Covid-19, firms have identified difficulties in conducting physical inspections due to social distancing measures, obtaining reliable property valuations and determining appropriate approaches to suspended or unreliable house price indices.’ 

 A property is worth what someone will pay for it

Many valuations at least can be delayed until there is more clarity.  

But for those needing to buy or sell a property now, it’s going to be very difficult to value anything for the next six weeks. 

‘I was shown a fantastic three-bedroom flat in central London asking £5.5million,’ Pryor tells me. 

‘The agent instantly mumbled “four and a half would probably do it” before I had got my face mask and rubber gloves on!

‘The truth is nobody knows. A property is worth what someone will pay for it.’    

John Baguley, valuations director at the Royal Institution of Chartered Surveyors, is keen to underline exactly this point. 

‘All valuations should be assessed to market value and that is defined by what a willing buyer is prepared to pay a willing seller to transact,’ he says. 

‘The role of the valuer is not to make the market, it is to interpret the market as it is and we use a scale of factors to make those judgements. 

‘Ideally we want to consider what identical properties in similar locations actually sold for as recently as possible. In normal circumstances sales values from three months ago might be considered recent, but clearly now the market is very different. 

‘In the absence of those comparable property sales we can also be looking at what is happening with asking prices, market activity and other supporting information to form an opinion of market value’

Will we see down valuations? 

Mr Baguly’s pragmatic and balanced view on valuations makes sense, but there are those who expect valuations to become overly conservative. 

Speaking live on a webinar hosted by trade publication Mortgage Introducer, buy-to-let lender Landbay chairman Tony Ward warned that the result would be a slew of down valuations.

‘I sympathise with the valuers because they know that house prices are likely to go down, they just don’t know – as nobody does – by how much and for how long and which ones will be affected the worst. It is too early to tell,’ he said.

‘So they are likely to overcook it. We will see valuations on the downside probably, because they are at risk. 

‘We have to understand that valuers are giving an opinion that, if it is wrong, three, four, five years down the line they could be sued for that opinion for losses incurred because they overvalued.

‘They are almost certainly going to be doing the opposite, which is downvaluing.’

This has obvious implications for homeowners hoping to sell and for hopeful buyers. 

Property transactions agreed before the crisis are already being renegotiated as buyers fear their offers are no longer accurate. 

It will leave those who must sell soon forced to accept lower offers – though they should also be able to secure cheaper prices themselves when moving. 

Those not forced to sell now are likely to sit on their hands until there is more clarity about the outlook for property prices. This restricted supply could in turn support prices.

But it would lead to a collapse in transactions – bad news for estate agents, valuers, mortgage lenders, brokers and conveyancers, all of which rely on the volume rather than value of home sales for an income. 

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Raffle House still 20k tickets short of Whitechapel flat target


The London flat a raffle firm is STILL struggling to give away: East End property will now come with a £30k Land Rover – but ticket sales are still way off target

  • A property raffle has added a £30k car to its original prize pot of a £500k flat 
  • The competition has been running 10 months but still hasn’t sold enough tickets 
  • It has promised to give the property away no matter how many tickets it sells 

A property raffle has added a £30,000 car to its original prize pot of a £500,000 London flat in a bid to tempt more customers to purchase tickets.

Raffle House has been selling tickets at £10 per entry for the two bedroom flat in Whitechapel since July last year, promising to hand over the property even if it didn’t mean its target of 60,000 tickets sold.

However, it has now added a £30,000 new Land Rover Discovery to the prize, just two months before the competition closes on July 31.

A property raffle has added a £30,000 car to its original prize pot of a £500,000 London flat

The ‘professional house raffle firm’ has come under fire previously for failing to give away the promised property and instead offering a reduced cash prize instead.

This time round, it has promised to give away the property no matter how many tickets are purchased – selling 40,000 so far – 20,000 shy of its target amount.

As well as offering the East London property, the winner of the competition is also now able to claim the £30,000 market value of the Land Rover Discover in cash, instead of the car itself, it they so desire.

In addition to awarding the property, Raffle House said it will also cover stamp duty costs, legal fees, £3,000 to cover the first year’s utilities, council tax and other such necessities.

Tickets cost £10 each with discounts available for multiple ticket purchases, for example, those who buy three tickets, get four free whilst those who purchase 10, will get 15 free.

Everyone who buys a ticket is also automatically entered into a weekly prize draw where £1,000 is given away.

Another £10,000 worth of tickets have also been given away to NHS workers for free, during the coronavirus pandemic.

Giveaway: The £500k East London property that is currently up for grabs from Raffle House

Giveaway: The £500k East London property that is currently up for grabs from Raffle House

Tickets cost £10 each with discounts available for buyers who make multiple ticket purchases

Tickets cost £10 each with discounts available for buyers who make multiple ticket purchases

Benno Spencer, chief executive of Raffle House, said: ‘These are uncertain and worrying times and we hope that our competition will bring fun, excitement and a little optimism to those that enter.

‘Of course, for one lucky player it could prove to be absolutely life-changing – the property must be won regardless of whether we meet the ticket threshold or not, so someone is going to be leaving lockdown with a whole new life ahead of them.’

The East London home has been valued at £500,000 by Kings Group, an estate and letting agents operating in London, which also advised the property would get a monthly rental income of £2,100.

The flat has been valued at £500k by Kings Group, an estate and letting agents in London

The flat has been valued at £500k by Kings Group, an estate and letting agents in London

It added that it may bring the draw date forward if the target is met before the closing date.

However, as it still has 20,000 tickets to sell in under two months, this is unlikely to happen. 

Raffle House previously told This is Money that the business would cover the shortfall should it not sell enough tickets and that, as it is setting up a long-term interest in the property raffle industry, it is capable of operating sub-profit due to its investment. 

It also confirmed that it will not be extending the date past July 31 and no matter how many tickets are sold by then, the property will be given away.

The company’s previous offering of a Brixton flat ended with the winner taking home a £173,000 cheque instead – after the competition had been extended multiple times thanks to the firm not being able to sell enough tickets. 



I’m worried about my job – can my lender withdraw my mortgage offer?


We’ve exchanged contracts on a property but I’m worried about job security – can the lender withdraw its mortgage offer?

 We’ve exchanged contracts on a property but I’m worried about my job.

I haven’t been furloughed, but in my line of work and with the economy going the way it is, I have concerns about job security.  

If I lose my job or am forced to take a pay cut before we complete our purchase, is there a chance our mortgage lender could withdraw our offer? 

Your lender has the right to withdraw their offer even after you’ve exchanged contracts

Will Kirkman, of This is Money, replies: The bad news is your lender has the right to withdraw their offer at any time, and yes this even extends to after you’ve exchanged contracts. 

Your lender has the right to reassess your finances at any time that it pleases, meaning that if your situation changes dramatically they could withdraw their offer.  

Not only is this frustrating, but it can end up costing you an awful lot of money. 

If the sale falls through, you could lose the fees that you have already paid. If you can’t secure a new loan in time, you’ll lose the deposit you have had to put down to secure the deal – sometimes tens of thousands of pounds. 

This is more likely is there has been a long time between exchange and completion, for example with a new build property. 

However, this only happens in very rare circumstances, as an expert explains:

Brian Brown, consumer finance expert at Defaqto replies: It’s technically possible for a lender to do this, but unlikely.

Normally you apply for a mortgage, the lender completes their checks and makes you an offer, which you formally accept. 

The lender then confirms that you will be allowed the mortgage provided nothing changes in the interim such as your income changing or the value of the house you are buying changing significantly. 

It’s rare for a mortgage lender to reassess the borrower’s finances once an offer has been made. 

However, in these uncertain times lenders may be checking finances more than usual since coronavirus has changed people’s circumstances.

This contract from a major lender explains why and how your offer could be withdrawn

This contract from a major lender explains why and how your offer could be withdrawn

Mortgage offers made have a period of time for which they’re valid – typically three months – and often you will pay a ‘product fee’ or ‘booking fee’ to guarantee the deal. 

Once you formally accept the offer and pay the booking fee, both sides are normally committed to the deal. 

However, if your house purchase is delayed so that the mortgage offer expires before you complete the house purchase, the mortgage offer ends and you have to obtain (and possibly pay for) a new mortgage offer. 

Defaqto's consumer expert Brian Brown

Defaqto’s consumer expert Brian Brown

The lender isn’t ‘withdrawing’ the mortgage, rather the offer has expired. It isn’t uncommon for this to happen if you are in a difficult chain.

In reality, mortgage lenders can withdraw their mortgage offer after exchange of contracts and all the way up until completion leaving the borrower to bear the costs of failing to complete. 

This is why you would normally leave a very short space of time (no more than a few days usually) between exchange of contracts and completion. 

If you exchange too early in the process you run the risk of being contractually obliged to buy a house with no means to pay for it.

Things you can do to avoid being caught out include:

  1. Choose mortgages with a low fee
  2. Get a ‘decision in principle’ from a lender early in the purchasing process
  3. Don’t make a mortgage application until you are sure of the house you want, and the price you are paying
  4. Don’t exchange contracts until very close to the completion date (your solicitor will advise on this)



Financial Conduct Authority warns over mortgage holiday debt threat


Mortgage holiday debt threat: FCA warns homeowners face paying thousands of pounds in extra interest

Interest threat: The FCA has warned on mortgage holidays

Homeowners who have deferred their mortgage payments are being warned against a debt binge after the go-ahead to extend mortgage holidays for a further three months has been approved.

The Financial Conduct Authority (FCA) warns that homeowners face paying thousands of pounds in extra interest if they put off making payments.

The FCA’s Christopher Woolard says that if customers can afford to restart payments ‘it is in their best interests to do so’, but support will be given to those who can’t.

Customers will also be allowed to make partial repayments.

How house buyers are slashing offers and blaming the virus


Buying and selling properties has been near impossible during lockdown, with around 450,000 transactions suspended. 

But with restrictions now partly lifted, estate agents are seeing a huge rise in enquiries. Yet the impact of coronavirus is still being felt in the property market – from nervous sellers to buyers trying to scoop a possible bargain.

Dog trainer Joe Nutkins and husband John, a community support officer, were looking forward to selling their bungalow in Clacton-on-Sea, Essex, and moving to a larger home nearer Colchester where they both work.

Concerns: Joe Nutkins, who suffers from ME, fears viewers coming to her bungalow

Having put their property on the market at the end of last year, they accepted an offer in mid-March, meaning they could start their own property hunt in earnest. But within a week, Britain was in lockdown, their buyer had withdrawn their offer – and everything ground to a halt.

‘We’ve been stuck in limbo,’ says Joe. But even now that property viewings and valuations have resumed, Joe, who suffers from myalgic encephalomyelitis, is horrified by the thought of prospective buyers tramping through her bungalow. 

‘I just don’t understand how that is being allowed,’ she shudders. ‘Even though the guidelines have eased, it doesn’t necessarily mean it’s OK. I don’t want strangers coming round my house – how many houses have they been round before mine?’

Mark Hayward is chief executive of estate agent trade association NAEA Propertymark. He says he has been hearing similar concerns from other sellers. ‘They really do not want strangers coming into their property – and they also don’t want to encourage people to travel to areas which have seen low infection rates, such as the West Country.’

Mary Beeton, head of residential sales at estate agent Hamptons International, agrees. She says: ‘There are a lot of people who don’t want to have viewings in their homes. Some don’t want to go back to normal, while other people are desperate to.’

When lockdown came in at the end of March, the property market all but stopped. Some matters carried on such as mortgage applications and legal paperwork, but a ban on physical viewings, valuations and moving house meant that many transactions were placed on hold.

Now that valuations and viewing are possible in England once again, estate agents are reporting a boom in business, particularly with many people looking to move out of London

Now that valuations and viewing are possible in England once again, estate agents are reporting a boom in business, particularly with many people looking to move out of London

Government data shows there were half the usual number of house sales last month (nearly all set up weeks earlier) compared with March or April last year – and ten per cent fewer than the previous low in January 2009 in the wake of the financial crisis.

The lockdown acted as a hard brake on the property market. ‘The lack of valuations and high loan-to-value mortgages prevented many, especially first-time buyers, from doing anything,’ says Nick Morrey of mortgage broker John Charcol

Some deals did go through. Tom Smith of Fine and Country estate agents in Berkhamsted, Hertfordshire, says he was able to oversee an exchange and completion of a former doctor’s surgery valued at £1.5million – even though the buyer, from New York, never set foot in the property.

But now that valuations and viewing are possible in England once again, estate agents are reporting a boom in business, particularly with many people looking to move out of London – to be nearer family, to move to a bigger property suited to home-working or to one with more outside space. 

Virtual viewings have increased ten-fold since lockdown and will continue to be popular 

 Mary Beeton of Hamptons International

‘There’s a lot of pent-up demand, thanks to eight weeks of lockdown,’ says Hamptons’ Beeton. ‘There’s also a demand overhang from last year and the ending of worries over whether a Brexit deal would be struck or not.’

Online property portal Zoopla recorded a 139 per cent surge in website traffic the morning the property market reopened, with demand for details on properties in Oxford up a massive 332 per cent. Yet traffic was still down on the period just before lockdown. 

Similarly, Rightmove reported 11,000 new property listings after reopening, but listings are still 65 per cent down on the same period last year. Viewings are now being carried out with social distancing in mind. 

Vendors temporarily vacate the property leaving internal doors open to reduce the need for viewers to touch anything. Masks, gloves and hand sanitisers are used and tours are limited to one person at a time – with a gap of 15 minutes between viewings to air the house and clean surfaces. Most buyers are initially viewing properties online.

‘Virtual viewings have increased ten-fold since lockdown and will continue to be popular even after the end of lockdown restrictions,’ says Beeton. 

Coronavirus did more than delay house sales - agents are reporting a jump in buyers trying to renegotiate, even after agreeing a price

Coronavirus did more than delay house sales – agents are reporting a jump in buyers trying to renegotiate, even after agreeing a price

Vendors-turned-film makers have been guided on best practice, says Hayward. ‘We’ve had to explain to sellers that consumer protection regulations still apply, which means they have to show everything, not just the good bits.’

Coronavirus did more than delay house sales. Agents are reporting a jump in buyers trying to renegotiate, even after agreeing a price.

‘Sellers are being asked to drop their prices, which is really disappointing,’ says John Charcol’s Morrey. ‘Buyers justify this by saying property prices are going to fall, but there’s just no evidence for this.’

Beeton has also witnessed prices being renegotiated. She says: ‘We’ve exchanged on lots of properties over the last eight weeks and many buyers have tried to renegotiate. Interestingly, the reduction they achieved was really low – just 1.4 per cent in one London area.’

 If you do try to renegotiate on price, then it’s worth asking yourself what else are you going to buy

NAEA’s Hayward says he isn’t seeing evidence of a wider trend to renegotiate, but he is aware of it happening. ‘Sellers are proving resistant to that opportunistic, predatory approach,’ he says. ‘Before lockdown, sales were going well and there is currently a lack of supply in the market. So, if you do try to renegotiate on price, then it’s worth asking yourself what else are you going to buy.’

Elizabeth Parker and husband David [not their real names] have experienced first-hand this new trend towards renegotiation.

Wanting to move to the Kent coast, they put their Victorian four-bedroom home in South London on the market in January for £1.45million and received an offer close to that – which they accepted – a few weeks later. This meant they could make an offer on a home in Margate. But days before they were due to exchange, the buyer dropped their offer by another £100,000, claiming coronavirus meant the value of their home had fallen.

‘What makes it worse is that there’s been no change in their circumstances – he’s a banker – and they haven’t dropped the price of their flat which is just a few minutes away,’ says Elizabeth. ‘They were just using a dreadful situation to their advantage and it felt like they were trying to blackmail us.’

The Parkers said no and saw not only their own home sale fall through, but their intended purchase in Margate. ‘It’s been incredibly frustrating and stressful,’ she says.

For those still keen to sell, lockdown has given home-owners a chance to get their house into tip-top condition. Meanwhile, for buyers, top of the list has been getting their finances in order. ‘Having a mortgage approved and knowing what your budget is puts you in a strong position when you make an offer for a home,’ says John Charcol’s Morrey.

If you want to move house next year and your current mortgage deal is coming to an end, Morrey recommends transferring to a loan with your current lender where there are no early repayment charges. Hayward says taking into account the ‘new normal’ is now crucial when choosing a property.

He adds: ‘People are realising they might be working from home for a long period and thinking: ‘Do I really need to be within commuting distance of London?’ I recently spoke to someone who is moving from London to Yorkshire.’

If you are looking to sell, then now is a great time, he adds. ‘The market needs new stock so now is a good time,’ he says. ‘But be realistic on price. There is a lack of supply but that doesn’t mean prices are going to shoot up.’ 

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Mortgage holidays have been extended – how does it work and what will it cost you?


The Government has announced that struggling homeowners can now apply for a further three month mortgage holiday.

The scheme, which was initially set up in March, has been extended so that the deadline for applying is now 31 October, with borrowers eligible for a break of up to six months. 

Homeowners will now also be able to make reduced payments if they don’t want to take a full payment holiday by extending the term of their loan, the Government announced. 

But how does the scheme work? Will you be approved for a mortgage holiday, and what are the consequences of taking one? We take a look below.  

 The deadline for applying for a mortgage repayment holiday has been extended to October 31

How can I get one?   

A payment holiday can be offered to anyone who asks for one, and borrowers who are behind on commitments should be treated the same as those who are up to date, the Financial Conduct Authority says. 

This means you won’t need to be in arrears and in the majority of cases won’t need to show proof of financial hardship to qualify.

You may however, need to provide a brief description of your circumstances, the loan details and confirm that you are struggling to keep up with repayments. 

You then will be asked how long a break you wish to take and when you want it to start. 

Most major banks and building societies now have a payment holiday form online. Visit your bank’s home page and follow the links to coronavirus related advice.  

If you don’t have access to the internet or need urgent help, call your lender but be prepared for long delays. There are reports of customers waiting for hours before getting to speak to someone. 

NatWest have said it will proactively approach customers but so far it is the only lender to announce this, so it’s important you contact yours and don’t just cancel your direct debit. 

Don’t just cancel direct debits 

Homeowners have been unwittingly putting themselves into arrears by cancelling their mortgage payments without speaking to lenders first. 

Amid claims that borrowers were waiting up to 10 hours on the phone to speak to someone, many lenders asked borrowers to submit applications online to free up their helplines, or to only call if they are vulnerable or facing immediate difficulty.

But those who can’t get through who go on to simply cancel their payments without first speaking to their lender will be counted by credit referencing agencies as being in arrears.

This means they will struggle to remortgage in the future.

Anyone who has already cancelled a mortgage direct debit without speaking to their lender first, is advised to call them as soon as possible to let them know.

How long will it take to kick in?  

If you contact your bank by phone, ask for approval times. With online forms, timescales vary. 

Nationwide says it aims to respond to borrowers within five to seven working days, for example. 

Halifax says it will reply by text message within two to three working days, while TSB says it will respond by email in three working days.

How does it work? 

You can apply for a payment break of up to six months. Bear in mind you should only take a mortgage payment holiday if you actually need to, as it could end up costing you more in the long run.

At the moment, lenders are offering borrowers three ways to defer their mortgage payments.

Some borrowers will be able to extend their loan, effectively adding the extra three months onto the end of their term.

Others are being offered the opportunity to increase the mortgage size but keep the same term length.

This means that the mortgage will be paid off over the same period, but the borrower will be paying slightly more each month once payments start again.

Remember though, with both these options you will be paying interest on the sum accrued, meaning you’ll pay more interest overall.

Another option that some lenders are offering is a shorter term repayment plan, giving the borrower the opportunity to pay the debt back sooner over a period of, for example, six months.

Not all lenders will be offering all borrowers all of these options. Speak to your lender to find out which one you might be able to take.

Normally a payment holiday is granted on a case-by-case basis with financial hardship and general situational factors taken into account.

Double check with your lender that taking one now because of coronavirus won’t prohibit you from asking for one in the future.

Though it won't affect your credit rating a payment break may affect your ability to remortgage

Though it won’t affect your credit rating a payment break may affect your ability to remortgage

Is it worth it?  

More than 1.8million homeowners took a mortgage holiday after the scheme was announced in March. 

But while the Government has promised these payment holidays won’t affect credit reports, it can’t stop lenders from refusing to lend to these borrowers in future.

And industry insiders have claimed that some lenders are already starting to automatically decline applications for those who have taken a payment holiday.

So think carefully whether you want to do it and how it could affect your ability to refinance in future. 

Taking a mortgage holiday will cost you more in the long run, whichever way your bank asks you to pay it back.

For example, if you took a three-month payment holiday for a mortgage that started in January this year of £100,000 with 20 years remaining at the average two year fixed rate of 2.03 per cent. 

After your mortgage holiday, your monthly payments will go up from £505 to £515, and you’ll pay an additional £925 in interest over the lifetime of the mortgage. 

Broker Habito has launched its own calculator tool which you can use to figure out how much more you would owe if you took a holiday on your mortgage, which you can find here. 

At the moment, the calculator only works on a three month basis rather than six months. 

Habito's mortgage holiday calculator can help you figure out how much more you would owe if you took a break on your mortgage

Habito’s mortgage holiday calculator can help you figure out how much more you would owe if you took a break on your mortgage

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

HMRC: Property transactions at lowest level since records began


Sales of residential homes fell to the lowest level since records began in 2005 last month, new figures from HM Revenue & Customs show.

In April there were 38,060 transactions completed, which is less than half the number seen at the same point a year ago.

Having been given the green light to get moving again by the Government, the property sector is scrambling to shift its operations to ensure buyers, sellers and staff can adhere to social distancing measures while keeping deals moving.

Transactions over time: UK residential property transactions since 2005

Expected: Sales of residential homes fell to the lowest level since records began in 2005 last month, HMRC figures suggest

Expected: Sales of residential homes fell to the lowest level since records began in 2005 last month, HMRC figures suggest

According to HMRC’s new figures, which it claimed should be treated with ‘some caution’, residential property transactions during April this year were 53.4 per cent lower than in April 2019 and 46.1 per cent lower than March this year.

Lockdown measures stalled the housing sector and caused estate agents to close their doors, moves to be postponed and completion dates thrown into chaos. 

The Government estimated that around 450,000 buyers and renting tenants had their property plans affected by the pandemic. 

HMRC’s figures show completed sales with a value of £40,000 and above, but cautioned that its latest releases are subject to some uncertainty, and therefore its figures are provisional.

Its report said: ‘Impacts from Covid-19 are evident within the latest HMRC UK transactions data.’

Jeremy Leaf, a north London estate agent and a former RICS residential chairman, said: ‘Of course, it is always transactions rather than more volatile prices which are a better measure of housing market strength at this particular time.

‘This data comes at a particularly interesting time, just after the Covid-19 bombshell hit, so one of the first to reliably assess the damage. 

Impact: The Government estimated that around 450,000 buyers and renting tenants had their property plans affected by the pandemic

Impact: The Government estimated that around 450,000 buyers and renting tenants had their property plans affected by the pandemic

‘This has been significant with probably worse to come, while new normal values are established. 

‘On a more positive note, activity has picked up considerably since we returned to work, at least in part, although it will take several months for interest to build to offers and completions and be reflected in these or similar reports.’ 

Meanwhile, Joshua Elash, director of property lender MT Finance, says: ‘The April figures show just how dramatically the lockdown has impacted the property market with residential transactions hugely suppressed.

‘At a time when the Government is spending at an unprecedented rate, the corresponding drop in revenues is going to add further to the economic fall out from our response to Covid-19.

‘We expect May’s data to be similar to this, if not worse. We need to get the market fully open and working again as quickly as possible if we are to limit the damage to the economy as a whole and the property sector specifically.’

HMRC’s latest transaction figures are based on its own records, together with those from relevant authorities in Scotland and Wales.

Numbers published by the Office for National Statistics this week suggest that house prices across the country increased by 2.1 per cent, or £5,000, in the year to March, with average asking prices now around the £232,000 mark.

In London, house price inflation rose by 4.7 per cent in the year to March, marking the biggest annual jump since December 2016. 

London house prices remain the most expensive at an average of £486,000. The North East continued to have the lowest average house price, at £127,000, and is the only English region yet to surpass its pre-economic downturn peak of July 2007.

Some insiders in the sector think pent-up demand has been brewing amid buyers during lockdown.

Property website Rightmove said that on Tuesday this week it recorded its busiest day since Thursday 5 March, with nearly 5.3million visits.

Areas in Manchester, Liverpool and Leeds have shown particularly big upswings in buyer searches compared with a year ago, Rightmove added.

Miles Shipside, Rightmove’s housing market expert, said: ‘One week on from the surprise opening of the housing market and agents are still showing caution and quite rightly putting safety first, but many had already started to prepare during lockdown and so have been able to start reopening their branches and conducting viewings.’

Countrywide begins phased re-opening

Countrywide has started a phased re-opening of its offices after the Government gave the housing sector the green light to get moving again in England last week.

The estate agent group said social distancing measures were ‘resonating well with our colleagues and customers’, but added that it was too early to provide any financial guidance.

In the four months to 30 April, the firm’s adjusted underlying earnings were ‘significantly’ ahead of last year thanks to a £50million pipeline established before the lockdown.

In the year ended 31 December, total income dipped 3 per cent to £498million, after absorbing a £12million impact of the tenant fee ban.

Loss from continuing operations fell to £37million, from £224million posted back in 2018. The group said it had around £60million in the bank at present.

The group’s share price rose over 5 per cent earlier today. 

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Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.