Borrowers will be pleased to know that physical valuations for both residential and buy-to-let will continue to take place where possible during the second lockdown. At the moment the second lockdown is expected to end December 2nd. The government was keen to keep the housing market moving and confirmed that surveyors and valuers in England can keep entering properties providing social distancing measures were adhered to and subjected to Covid safety protocols.
Housing Secretary Robert Jenrick said: "Housing market update ahead of Thursday’s measures: Renters & homeowners will be able to move; Removal firms and estate agents can operate; Construction sites can and should continue; Tradespeople will be able to enter homes."
The Royal Institution of Chartered Surveyors (RICS) said valuers will be able to carry out physical valuations during the month-long shutdown which starts on Thursday 5 November.
In the event a resident needed to shield or isolate themselves, some lenders will instead try to use automated valuations or desktop valuations.
Some more specialist buy-to-let lenders such as Fleet Mortgages and Keystone Property Finance confirmed that where a physical valuation is required but not possible during the current lockdown, the application will have to be postponed until it can be done. A remote valuation whether that be desktop or automated will not be accepted or possible.
It’s important to know that Fleet Mortgages and Keystone Property Finance are lenders which rely on via capital markets as their funding source, as they are not banks. The same similar protocol goes for other lenders which are funded by securitisation.
Fleet Mortgages distribution director Steve Cox said: “For those of us that rely on capital markets and funding lines the honest and brutal answer is there is currently no alternative to physical valuations. “That isn’t likely to change fast. It’s not a Fleet thing or a Keystone thing, it’s not even funders objecting to it. It is other people in the chain of securitisation that just won’t accept anything other than a physical valuation.”
Keystone Property Finance CEO David Whittaker explained the reason for this was a result of interventions following the credit crunch put in place in the USA, and while there was hope, it was still some way off. “There’s little appetite currently from the capital markets to change that,” he said.
In recent weeks, backlogs have built up due to the sheer volume of transactions taking place as buyers rush to take advantage of the stamp duty holiday which is in place until the end of March. It is now feared many buyers could miss out on the tax saving due to the longer transaction times.
The rules regarding valuations and home viewings being able to continue taking place only applies to England. They are currently not permitted under lockdown regulations in Wales, Scotland and Northern Ireland.