With the Government urging home buyers to put their plans on hold for the time being, there are still actions buyers can take to help their process go more smoothly once they are able to move.
The coronavirus pandemic has seen the Government advise buyers who have exchanged contracts on an occupied property to delay moving ‘where possible’ while strict measures to combat Covid-19 remain in force.
Many will now be occupied with negotiating an extension to their completion date, with advice being that the revised contract should contain a clause allowing for either party to delay the new date should coronavirus mitigation measures once again be enforced.
With the current measures giving the majority of us more time at home, buyers now have an opportunity to make some other moves, if they haven’t done so already, to help get the ball rolling fast when the time comes.
The Council for Licensed Conveyancers (CLC) has put together this guide for getting your house in order before the market resumes.
Information you will need to be ready to buy after lockdown ends
When buying or selling a property, it can seem as if even before they deal with you that everyone from estate agents to conveyancers to mortgage brokers are all asking you for the same information.
It can seem frustrating and time-consuming being asked to provide the same forms of ID or bank accounts over and again, but why are they asking for this information?
What each of them seeking to do is verify that you are who you say you are. If you are buying a property that the funds you will be using come from a legitimate source, and that if you are selling, that the property is yours to legally sell.
While this can feel like a real bureaucracy, it’s important to remember that while you know you are who you say you are, these advisers don’t. In fact, they have a strict legal obligation to carry out these checks.
It is worth taking comfort from these thorough checks because the advisers for the other party will be doing the same, which helps to safeguard you both through such a significant transaction.
Why home buyers have to repeat themselves
Added to the rigamarole is the fact that you have to provide the same information time and time again, each time you contract with a different party. This leaves many asking why all the advisers can’t just talk to one another.
Trust me, whether it’s an estate agent, a property lawyer or your bank, they’re not purposely trying to annoy you at what is an already stressful time.
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The reality is that they are each regulated separately and under English law are liable if something goes wrong. Therefore, they must take responsibility for their own checks, without relying on someone else’s. The legal guidance on this is clear.
In 2014 a company, Dreamvar, thought they were purchasing a property from a seller. Still, unbeknown to Dreamvar, the seller was a fraudster who had managed to obtain both the driving and TV licence of the true owner and get them certified by a solicitor.
It was only after the buyers had transferred the money for the property that they discovered they had been defrauded and the money was gone. Unfortunately, this case is not unique.
Why criminals target property
Criminals see property transactions as a great way of ‘cleansing’ the proceeds of their crimes. Buying a property enables criminals to launder large amounts of money in a single transaction.
So alongside being able to prove you are who you say you are, this is why you also have to demonstrate where the funds for your purchase are coming from.
Your source of funds could come from the sale of another property, savings, an inheritance or a financial gift from family or friends. Yet, whatever the source, you will have to prove where it came from.
For example, if part of your house deposit is a gift, the person gifting you the money will have to demonstrate how they came by the funds. So, in today’s world where the ‘Bank of Mum and Dad’ is often a significant contributor in house purchases, parents will have to confirm the amount of the gift and how these funds were obtained.
Yet, as complicated as all this sounds, a bit of forward planning goes a long way in a property transaction. Being prepared increases your chances of a seamless, quick transaction. So, with that in mind, it’s worth being aware of these checks in advance and getting the documentation together that you need at the beginning.
Documents you’ll need to buy a home when coronavirus measures are lifted
You will need to show:
– Proof of where your funding has come from, this might include your last three months’ payslips; a P60 from your employer; tax return and other documents if you are self-employed. More information on the documents you need is available on the Money Advice Service website. If some, or all, of your funding is coming from an inheritance, you will need evidence from the executors of the estate. If you have money coming from a family member, you will need a letter from them confirming that the money provided is a gifted deposit and that they have no rights over the property.
– A proof of identity document, such as a passport or driving licence. A full list of official identification documents is available on the Government’s website.
– Proof of your current address, such as a driving licence, bank statement, or utility bill (not more than three months’ old).
If you want to know any more about the property buying and selling process, read the CLC’s guides on buying or selling your home.
Stephen Ward is director of strategy and external relations at the Council for Licensed Conveyancers
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