The property buying process is taking significantly longer to reach exchange of contracts after an offer has been accepted as the stamp duty holiday nears its end.
With the deadline looming, Thiara Malik, partner at JMW Solicitors, reports that there has been a notable dip in new instructions that are looking to complete within the stamp duty holiday period, especially if there is a chain involved.
According to Rightmove, almost a third of residential property sales fell through last month as purchasers were deterred by the looming end of the tax break.
Rightmove said 29% of proposed purchases collapsed across the country in January – a figure that has gradually increased month-on-month since November last year.
Separate analysis by property technology company Movewise recently found the average time from offer to exchange was 28 days longer in recent weeks when compared to that over the previous six months.
According to Movewise, delays with property searches and conveyancers dealing with a backlog had seen the average time to exchange contracts increase from 96 to 124 days after an offer had been accepted, and so Malik’s comments are unlikely to come as a surprise to most agents.
She said: “We have noticed a slight downturn in new instructions that are looking to complete within the stamp duty holiday especially if there is a chain involved.
“Our sellers’ clients are accepting that any new sales that are agreed can only realistically proceed if the we are able to provide a full legal pack which includes up to date searches and an LPE1 pack, if applicable.
“Managing delays caused by lenders in carrying out valuations and issuing mortgage offers, and obtaining search results in time has been some of the biggest external factors which are delaying the whole conveyancing process and no doubt will ultimately impact whether transactions meet the 31st March deadline.”
Comments (3)
Property Searches Direct has been a solution to the earlier return of searches for some months now and now have law firms that refer clients to us the day they receive a memo of sale so as to shave time off the transaction length by enabling search ordering immediately by the client. We have made the difference between timescales being hit and not. There is no longer the need to conveyancers to take client funds and place the orders, as the ordering process can be placed firmly in the clients hands to get underway with our safe guidance to ensure the order and delivery of the correct products.
We aim to work closely with estate agents who are serious about getting their clients better prepared for a move.
I am interested to read that
‘Our sellers’ clients are accepting that any new sales that are agreed can only realistically proceed if the we are able to provide a full legal pack which includes up to date searches’.
We provide services to the public that enable this to happen on day 1 of marketing a property and wish that more thought was given to this in the summer. If as much effort had gone into finding solutions as has gone into trying to extend the SDLT holiday and hoping that bottlenecks would miraculously solve themselves everything would be fine. We provide Collaborative environments for both Conveyancers and Agents to allow clients to get legally prepared rather than perpetuating a cycle or blame and resentment. Do please reach out if anything resonates, even if it sounds fanciful.
Hi Mike,
It’s great to hear your talking about positive steps and not blame. The world of conveyancing searches is changing but unfortunately not as fast as anyone would probably like. More and more data is being extracted and used from local governments, all of which will speed up the process. However, this is only possible if the industry adopts our forward thinking approach by providing data/information up front.
With the adoption of data comes real-time analysis and conclusions. Searches will not expire, they will be refreshed automatically on the trigger of a milestone within the process or better still if anything changes in the underlying data.
Agents are not doing the consumers any favours by omitting information up front. Anything deemed adverse will come out in the conveyancing process and potentially cause a fall through or a price negotiation. Knowing that facts up front allows for any issues to be resolved before the transaction get too far.