Stamp duty rush holds up homebuyers amid processing delays


Delays are holding up homebuyers as a post-lockdown surge in demand fuelled by a temporary stamp duty holiday has piled pressure on conveyancing solicitors, mortgage lenders and surveyors to push through purchases.

The UK housing market took off after lockdown restrictions were eased in May, with agents reporting a rapid bounceback in demand and buyers aiming to complete within the nine-month stamp duty holiday announced in July. 

Data this week from TwentyCi, a consultancy, found the number of homes placed on the market in the three months to September was up 36 per cent on the same period last year, while sales agreed were up 53 per cent. 

Demand is being driven by “a combination of monetary policy (low interest rates), a generous fiscal policy (furlough payments and a stamp duty holiday) and a significant change in consumer preferences (rural locations and additional space),” it said.

However, the number of contracts exchanged in the third quarter was down 40 per cent compared with 2019, suggesting significant “pinch points” among professional services firms such as surveyors, conveyancers and mortgage lenders, TwentyCi said.

The hold-ups have led mortgage brokers to warn home movers not to delay if they want to capture stamp duty savings of up to £15,000. Legal & General Mortgage Club on Tuesday said home movers now needed nearly four months to complete from start to finish. 

Research by the broker group found the time taken between a mortgage application to a mortgage offer — assuming a straightforward property purchase — had expanded from less than two weeks before the pandemic. Thirty per cent said it was taking 3-4 weeks and 32 per cent said 4-8 weeks.

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Mark Harris, chief executive of mortgage broker SPF Private Clients, said lenders had been unable to resume pre-pandemic levels of work under health and distancing restrictions. “There’s an uptick in demand and the banks are struggling.” 

Unless they started the purchasing process by the end of the year many buyers would be hard pressed to complete by the March 31 deadline, he added. Legal & General said the search for a new property should be under way by November 1 to avoid problems. 

Conveyancers pointed to problems with local searches as well as conveyancing and surveying resources. Beth Rudolf, director of delivery at the Conveyancing Association, said the average time taken to get to a “proceedable offer” was now 77 days, and from there to exchange was another 123 days. “That’s way past March 31,” she said.

Ms Rudolf said sellers should instruct a conveyancing solicitor the moment they list their property for sale, not when they agreed an offer. This would allow them to save time on reviewing essential legal information on title, leases, cladding or any problems thrown up by an old or unusual building. 

Rob Hailstone, founder of Bold Legal Group, a conveyancers’ network, said the “glitches in the system” stemmed from reduced or furloughed workforces and capacity problems with working from home. 

Some solicitors in his network told him they had put up fees to control demand. “Some have said they might not take on a client if they arrived in January insisting on completing by March 31,” he said. 



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