The impact of COVID 19 has affected the real estate market all around the world. In the UK, the real estate market has been hit because of three specific factors; the first being the fact that the economy has taken a hit. Secondly, buyers cannot transact because almost everyone’s livelihood and business have been impacted due to coronavirus. Thirdly, and most importantly, buyer confidence has seen a significant decrease. Yet, property transactions are still prevalent. Whether you’ve signed the lease on a new property or you’ve been considering investing in a new property, every buyer or the potential buyer has one question in mind, “What does Covid-19 mean for my property deal?” From estate agents in Buckingham to real estate agents all over the UK, here’s what the experts have to say.
How can I renovate my property if I can’t fly there?
If you’ve bought a property in a place that requires you to take a flight, then conveyance might be a problem. Whether you want to travel to view the property or you’re in the middle of the renovation process, taking a flight to and fro does come with its risks. Plus, with multiple airlines reaching the brim of bankruptcy, and the extra protection measures that airlines are taking to ensure a safe flight, the factor of increased flight fares does come up. In that case, it is best to sign over power of attorney to a family member or trusted real estate agent in the area. That way, he or she will be able to overlook renovations and sign required documents ensuring that you don’t need to keep travelling for the same.
How do I repay the mortgage with the uncertainty of wage cuts and unemployment?
Before buying a property, most investors set aside a certain percentage of their monthly income to pay the mortgage installments. However, with wage cuts and the uncertainty of having a steady job by the time COVID-19 is over, there is a fear of defaulting on payments. In this case, it is best to keep aside the monthly mortgage amount that needs to be paid and live within your remaining means. While that is easier said than done, consciously saving money might help you set aside the amount you need without tightening your pocket. Also, it won’t hurt to dip into your savings to ensure you don’t default on your payments. Of course, taking a bank loan is always an option.
I have paid the deposit, but I am not sure I can proceed. What do I do?
Usually, a buyer has to pay around 20 percent of the total value of the property as a safety deposit. If you feel that you are unable to proceed with the purchase, then you might be able to use the ‘force majeure’ clause to your advantage. This clause frees both parties from liability, in this case, the buyer, due to extraordinary events or unforeseeable circumstances. Of course, it is essential the property contract was signed before the pandemic for it to be applicable. Also, you might need proof that COVID 19 has affected this sale. However, in most cases, a simple exchange of emails between the buyer and seller as well as the notary, or an exchange of emails between the real estate agents and the notary might be helpful if the buyer wishes to extend the completion date. The handover for the property might be delayed, but at least you don’t lose your deposit, and you get to buy the property.
I am due to complete my rental property. Should I finish it early or delay it?
Depending on your budget, your available finances, and any upcoming agreement with potential tenants, you need to make his decision wisely. It is always best to stick to the original plan and go with the flow. If you have already found tenants who are willing to move in on a specific date, ensure that the property is completed a few weeks before time so that you do not have to worry about the consequences of the people who have been in and out of the house contracting the virus. If you do not have any tenants who are waiting for the property, you could delay the renovation. However, keep in mind that as soon as life goes back to normal, there will be a sudden increase in the demand for rental properties. In that case, you don’t want to miss out on great opportunities because you delayed the completion process.
Whatever your doubts or questions may be, it is best to speak to your real estate agent or solicitor to get the most accurate and professional advice. While not everyone may have the answers, it is always a good idea to consult professionals.