Market Update 2021
Market Update
27th January 2021
We are all living in a world that only 12 months ago we could never have imagined. The coronavirus pandemic has touched all our lives and created a whole raft of individual challenges. The milestone of over 100,000 deaths being passed is heart breaking and this third lockdown is splitting public opinion on whether we are doing enough to finally beat this virus. The number of new cases is now falling (albeit at a slower rate than hoped for) and the roll out of the vaccine is progressing well and providing a much needed light at the end of the tunnel. Whilst living through these unprecedented times the housing market has mainly remained open and has been significantly more robust and active than even the most optimistic of predictions.
Undoubtedly, one of the key reasons for this has been the Government policy of increasing the threshold for the payment of stamp duty to £500,000 for those buying their main home. It was always Government policy that this incentive would run until 31st March 2021 and to qualify for this saving you must legally complete on your purchase by this date. It is therefore understandable that most clients in the process of moving home are very focused on trying to move before the deadline.
When the Government announced this policy, I don’t think they anticipated the overwhelmingly positive affect that it would have on the market. This is obviously welcome if you are looking to move home (or own a business entirely dependent on the housing market!) but it has pushed the system to the point of breaking. I have already gone on the record with my frustration at the endless delays some clients experience with the final stages of buying a home. This has recently been compounded by record high transaction levels where most buyers are aiming to move by the same date. We have seen:
· Mortgage companies are currently extremely busy and understaffed. Some companies are taking over two weeks to even open their post, let alone action and progress a mortgage application. If anybody in your chain has a deposit of 15% or less, the mortgage companies are being extremely cautious with these clients and carrying out additional references and checks, adding weeks to an already delayed mortgage process.
Surveyors are also over stretched and in some cases fully booked 3 weeks in advance.
· Local authority searches used to take 7 – 10 days, they are currently taking over 2 months. To make this position even more uncertain, Plymouth City Council provide an estimated return date when a search is applied for. Some searches that were applied for in November with a return date for January are not back yet, making solicitors nervous that other searches may take longer than the declared 2 month turnaround.
· Local probate offices have been closed and a grant of probate has gone from taking 6 – 8 weeks to over 6 months in some cases. Some solicitors are slow in applying for the grant and this is causing further delays. Most chains do not have a probate sale in them, but if yours does please be aware of the possible delay.
Conveyancing solicitors are in general terms the busiest they have ever been. As a result, most are not very forthcoming with updates for us and are also very slow to return their clients’ calls. I can understand this, it is a difficult position for them. Most solicitors that I know are currently working seven days a week and late into the evening. Every time they take a call from an estate agent it stops them working on your sale and delays them even further. However, it is impossible for us to provide our clients with updates without speaking to the solicitors as they are the ones doing the legal work. We have also seen the volume of calls to us dramatically increase due to the number of clients that cannot easily get hold of their solicitor. We fully understand this and obviously want to help. However, please bear in mind we can only pass onto you what your solicitor tells us, and if we can’t get hold of your solicitor we may not be able to offer all the information that we would like.
Yesterday it was announced by the Petitions Committee that the House of Commons will hold a 90-minute debate at 4.30pm on Monday 1st February with reference to extending the stamp duty holiday. There have now been over 126,000 signatures on the online petition that has triggered this debate. I am keeping my fingers crossed that they will either extend the deadline, or maybe more sensibly tapper the relief so we no longer have this cliff edge deadline.
If the debate on Monday is unsuccessful, I can only see the pressure on conveyancing solicitors increasing as we get closer to the deadline. Many are already telling us that due to delays with searches and incomplete chains many of their clients will miss the deadline. One of the biggest challenges is even though you may be ready on your sale or purchase, it only takes one link of your chain to not be ready and everybody will miss the deadline. Solicitors are working very hard to try and avoid this happening, but the National Association of Estate Agents recently reported that 69% per cent of their members are expecting to see an increased in failed sales.
It is not possible for solicitors to promise when a sale will complete and many are now advising their clients to have funds available to pay their stamp duty in case the deadline is missed. We still have two months and I have no doubt that solicitors will do everything possible to help their clients.
I apologise for the generic nature of this email and I appreciate that your circumstances may fall outside the assumptions that I have made. If you have any specific queries regarding your move please contact my colleague Steven (steven@plymouthhomes.co.uk or 01752 514500 option 3) in the first instance.
I will provide a further update with regard to the petition for the stamp duty holiday as soon as there is any news.
Thank you for your continued custom and in these uncertain times please stay safe,
With kind regards
Ian Mitchell
Company Director