Stamp duty: Phil Spencer says he sees ‘catastrophe brewing’
Homes are currently taking 29 percent longer to sell once under offer due to delays with conveyancing. Data analysed by Movewise has found that there is a backlog of transactions which has extended how long transactions are taking to complete. Rather than taking an average of 96 days, they are now taking 124 days.
This means properties which went under offer from late November 2020, are unlikely to complete before March 31.
The transaction length also depends on the region.
The time to exchange contracts once an offer has been made increased in Scotland by 37 percent from 70 days to 96 days.
In the northeast, this increased by 32 percent from 87 to 115 days, and in London the average time increased by 29 percent from 97 to 125 days.
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The multi-agent property seller looked at almost half a million sales across the UK where the contacts were exchanged over the past 30 days and 180 days.
In the last month, the average time from offer to completion was 28 days longer – or 29 percent.
This is compared with the average time over the past six months.
The conveyancing process is currently delayed causing a bottleneck, as they deal with an increased workload.
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Conveyancing is the legal transfer of a property from one owner to another.
The exchange of contract is when the transaction will through and completion is when everyone moves.
Councils are also reportedly also struggling to handle the level of property searches.
Tom Scarborough, CEO and founder of multi-agent property seller Movewise said the latest data shows how property transactions are “under pressure” at the moment.
He continued: “Although houses are going under offer on average five weeks after initial listing, the bottleneck in the conveyancing process is causing a headache for both sides of the transaction.
“Buyers are still keen to beat the stamp duty deadline and sellers need to be aware of that before accepting an offer.
“To avoid transactions collapsing, any offer being made now should be on the understanding that completion is likely to be after the tax holiday ends.
“If required, buyers and sellers should enter into any negotiation on price, before the conveyancing process commences.
“An honest and frank discussion upfront, could avoid a transaction failing further down the line, after money and time has been spent on searches and surveys.”
The stamp duty holiday deadline is currently set for March 31, 2021.
The holiday began in early July and boosted the property market after months of low activity when the market was put on pause during the first lockdown.
There have been calls for the tax holiday to be extended in light of the latest lockdown.
However, there has yet to be any word from Chancellor Rishi Sunak or the Government on whether this will take place.
Some campaigners are calling for a six-month extension while others are asking for a complete shake-up of property tax including stamp duty, capital gains and council tax.
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