Redundancy WWYD

[TheLette]

Hi, looking for advice on next steps. We are in a small chain which was formed recently. Got our mortgage in principle through and a few days later my partner was informed by his employer that they want to make him redundant (on a voluntary basis). Financially it will probably leave us better off in the long run, but it's bad timing because we need him to have a new job in order to complete the mortgage application and buy our next home. Unfortunately no workaround available (unless £250k magically turns up in our bank account!).

We are at a very early stage of the conveyancing process so we are hoping it's not a massive issue - hopefully he will get a new job in 4-6 weeks whilst the process continues. The broker knows and suggested we continue with the process, bearing in mind the average transaction time is 18-22 weeks so in theory we should have time. Job market for my partner's role seems buoyant. We haven't informed our solicitor or estate agent yet for fear that they will inform the rest of the chain and it will collapse.

If we tell our solicitor (mainly to get them to slow down as much as possible - we were gunning for an end of June completion), is the solicitor obliged to tell the rest of the chain? What about our estate agent? I want to try to make the rest of the chain realise that end of June isn't achievable but without telling them the true reason. If push came to shove we could continue to sell, but we really don't want to lose our upwards purchase.

Any advice welcome!

I'd press ahead (if you can). I found myself in the same boat in that I was told in January that i'd be made redundant at the end of March. Knowing this I still went ahead and completed in Feb. I did this knowing I had reserves in place for the following year should the worst happen. The worst did happen as Covid hit, so I was unemployed for circa 8 months but this was still manageable based on the reserves I'd had in place.

Surely he has to volunteer to be made redundant voluntarily? They cant tell him he is going to be made redundant voluntarily. Does he want to take the redundancy?

Give another reason that you have to delay things (family reasons, kids with exams, medical procedure... anything that’s difficult to prove). DO NOT tell your lawyer as they will have an obligation to report it to your mortgage lender as they will probably be acting for those too.

@hyperbole001 did you have a mortgage? We can't lie on our mortgage application, it would be fraud and due to being in a regulated profession I cannot risk that!

@Hellocatshome if he refuses to agree on a voluntary basis, they would move to an involuntary process so the end result is the same. Standard practice unfortunately (I am fairly familiar with how these things work). Even if we dragged things out, we would still have to inform the bank if we knew of any redundancy risk and then they would withdraw mortgage offer. And at least voluntary redundancy comes with a bit of free money plus pay in lieu of notice.

Ah I was just wondering if not volunteering would buy you enough time to get the house sale through but if you have to tell them anyway then it makes no difference. What awful timing for you.

I had a mortgage in principle yes. I completed on my place in Feb and was made redundant a month later. Yes, perhaps I should have declared this as I knew I was likely to be made redundant, however, I knew going ahead with the purchase was still not too big a risk for me.

Here's the issue - to qualify for a mortgage you generally have to be past the probation period if it's a new job. So if he joins a job on 3 months probation, he may not get a mortgage for that time. Similarly you need to sign that all the information you have supplied (like employer) is correct.
Unless he can get the redundancy to be delayed until exchange, I think you may need to put your plans on hold especially as you are in a regulated job so need to be scrupulous with the truth.
I would talk to your solicitor for advice.
(Sorry).

One more thing. If you change jobs during the application process I strongly suspect it will be treated as a new application and will get restarted.

I'm a bit at the broker's advice though. Is he advising you to lie or is it a non-standard mortgage you're getting (e.g. self-employed or similar)?

@NewHouseNewMe no the broker is not advising us to lie and I absolutely cannot do that because of my own job (and because, well I don't want to lie!!!). He spoke with the bank and apparently they just need the first payslip for the new job. A probation period is apparently not an issue. We would definitely tell the bank that the job had changed, and not proceed at all if he couldn't get a new job (which I think is unlikely).

My OH changed jobs during the buying process once, we told the mortgage adviser (in branch, Santander) and as it was the same industry/similar role they didn't bat an eyelid, just carried on as if nothing had changed.

I think it’s down to what the bank say, when you go and apply for the mortgage proper I don’t think you’ll be able to get away with saying he’s got a job if he hasn’t. If he finds one quickly that’s obviously good but can’t he just stay out rather than “volunteer” to be made redundant?

My own dh got “voluntary” redundancy recently so I sympathise. Are you confident he can get another job quickly? Job market not great, my dh expects to be unemployed for several months.

@Frazzled2207 sorry to hear about your DH. I'm hopeful for his role/industry and our location that he will find something relatively quickly. Initial discussions with agencies have been positive and there seem to be available jobs. He can't avoid volunteering to the redundant - it's a very small redundancy program and he is being targeted as head of the department so he can't hide!

Luckily by volunteering my dh got a reasonable package. Hopefully your dh will too if volunteering.

What my own dh does is very niche so there’s not so much out there, but thankfully due to a reasonable package we are not panicking (yet)

I think what you are proposing is pretty crappy to the rest of your chain - if everyone is hoping for an end of June completion to make the stamp duty deadline, but you are planning to ask your solicitor to 'slow things down' but not tell anyone else why, then you are expecting everyone else to take a hit of thousands of pounds because of your partner's redundancy in a really underhand kind of way.

@Hazel444 yes and no. End of June was always going to be a massive stretch as the chain was only formed towards end of April. Average time to complete on a property is 18-22 weeks. Everyone is treating end of June as a nice to have rather than a must. In fact our buyers originally asked for completion later in the year, before we had completed the chain. What I do want to do though is to ensure everyone is clear on a new timetable asap.

I think you really need to be honest with everyone - it's a pretty big thing to try and hide, and you may find that the rest of your chain will cut you guys some slack as everyone knows it's tough times for a lot of people's jobs at the moment.

If for some reason your chain finds out down the line about the real reason you want to delay and you didn't tell them, then they would rightly be pretty miffed and not trust you in the same way - a lot of house buying is done on trust in this country, people have to pay out a lot of money on searches/surveys etc before they are even guaranteed they will actually end up buying the property and if someone you are dealing with seems underhand then it just makes things more difficult than they need to be. Up to you of course but I always try to go by treat others how you'd want them to treat you :)

Hope everything works out with your DH's job search, sounds like a pretty stressful time all round.

Depends on your financial position. If you are comfortable servicing the mortgage if your DH is without a job for 6-12 months, then go ahead. It's a strange job market right now. Lot of jobs which were gone in last year for travel, hospitality, retail are now coming back fast. But other sectors like financial services which did well over last year, are now going to start announcing redundancies as they come out of the pause on job cuts during the pandemic. My DH told me about big cuts due to be announced in his bank. He himself is less certain about his position compared to 6 months back.

why have so many message been deleted in this thread?

One of the deleted posters is on loads of threads so I'm guessing spam