Banks are calling for the whole housing market to be suspended during the crisis and this morning The Times front page lead story said it had already happened.
It splashes with the headline: “Virus prompts No 10 to suspend housing market”.
The Times headline and story comes after mounting pressure from lenders to put the market on ice. The Times today concludes that the housing market is suspended anyway, with viewings cancelled, instructions to people to delay moving, and mortgage finance drying up.
The Daily Mail’s front page splash headline is “Don’t move home”. Its story says that the housing market is “all but frozen”, calling it a shut-down, and says banks have been lobbying for a full freeze on the property market.
Today’s Telegraph business section carries the splash: “Government suspends the housing market”. The paper says that the housing market “was halted last night by the Government after financial institutions said they could no longer operate properly”.
Today on BBC’s Radio 4 broadcast a similar report this morning, and the Financial Times is covering lenders’ concerns.
But an agent last night warned against banks trying to undermine the market rather than support it, and called on the Government to ignore lenders’ demands.
Banks pressing to freeze the market have expressed concern to ministers about the impact of the pandemic on valuations.
They have also expressed concern about giving credit when the economy is in freefall.
Lenders have told ministers that it has become impossible to survey properties.
UK Finance, the trade body for lenders, has written to its members saying it is seeking urgent clarification over the future of the market, “particularly as physical property valuations are no longer possible”.
One property lawyer, Laura Conduit at Farrers, told the Financial Times that banks will have to decide whether they can rely on valuations using videos of properties.
She said: “We haven’t got a clue what the value of anything is.”
Agent James White, of Yorkshire agent Belong, told EYE last night: “Time and time again, whenever there is a wobble in the property market, the banks can be relied on to undermine it.
“This time around, the market needs the full support of the banking system in order to avoid a collapse in confidence and house prices.
“If they implement a complete stop, who knows what will happen to house prices and repossession numbers?”
He added: “Given that the underlying fundamentals of low interest rates, steady demand and excellent employment levels created stability before the coronavirus pandemic, surely it is in everyone’s interest not to add to the woes of the economy and property market.”
Some lenders, including Lloyds and Barclays, have pulled many of their products, and some will only lend to borrowers with deposits of at least 40%.
Lenders have also said that their call centres are clogged with anxious home owners requesting mortgage holidays.
All told, tens of thousands of borrowers are said to be looking for payment breaks, but some are said to be pushing for breaks that they do not really need
Yesterday, Nationwide launched a dedicated coronavirus support page in order to free up phone lines and reduce waiting lines for customers including vulnerable people genuinely needing a payment break. www.nationwide.co.uk/support/coronavirus
One broker, Mark Harris, chief executive of SPF Private Clients, said: “Lenders are throwing all their resources into dealing with payment holiday requests.
“But in the same way that people are stockpiling food they don’t need, there are selfish borrowers who are asking for payment holidays when they don’t need them.
“This is blocking the phone lines for those who do. Borrowers should ask themselves: can I pay the mortgage this month? If the answer is ‘yes’, then keep off the phone to your lender and let those who do need a payment holiday get through.”
He added: “Borrowers may be worried that there is a funding crisis. There isn’t – the banks are awash with liquidity.”
However, he said that not all banks are set up for staff to work from home, and that call centres are operating on skeleton resources.