Housing Market Remains Open...for now! | October 2020

Headlines for October 2020

"The housing market will remain open throughout this period" stated Robert Jenrick MP, however whilst we may be able to carry on some industry experts fear we are in the middle of a perfect storm caused by:

Add to all of this the worry that if further measures do stop house viewings and offices are asked to close with furlough and redundancies on the cards, how can the backed-up pipeline get to completion in time for the 31st March 2021 SDLT holiday deadline. The Telegraph reports that "325,000 will miss out on tax savings of up to £15,000 because they won't transact before March 31".

SAM Conveyancing was asked to quote on different measures to help speed up the conveyancing process within this article, how ever for buyers currently with offers agreed it is most likely they will complete before. The worry is for offers in the new year which will be faced with tight deadlines and most law firms will get a their client to sign a waiver to protect them in the 4event of failing to meet the deadline.

Whilst the housing market remains open it is for all of us to ensure we do so safely and within current guidelines. The Law Society has provided the following to help - Coronavirus (COVID-19): Guidance to conveyancers advising clients on house moves.

In August 2020 we reported the conveyancing sector couldn't cope and 2 months on this has gotten worse. Accord to Zoopla HPI transactions are taking over 100 days from sales agreed to completion. Whilst this means a transaction takes longer it means that there is a lot of 'waiting time' where there is nothing to of on a file.

The knock on effect of lots of waiting time is that solicitors file counts have increased. The challenge with so many buyers and sellers waiting is when the external delays are no longer there and the solicitor is the only part of the chain left with the work to do. No longer can the blame be passed onto a delayed local search or a mortgage offer, the law firms will be left needing to find the extra resource to open up the bandwidth.

Whilst the Land Registry data has yet to be released the Bank of England reported lending approvals for house purchases increased to 91,454 in September the highest for over 12 years. Last year the figure was 65,780 and the number of completed sales was 72,748 in Sept 2019 so based on this we expect September 2020 volume to be in the region of 101,000 sales - volume not seen since March 2016 with the rush to complete before the second home stamp duty was implemented.

There are cries from the industry to have an extension to the stamp duty holiday for a further 6 months and to develop a method to help smooth the end of an extended Stamp Duty holiday to prevent another cliff edge. Home Buying and Selling Group have written a letter to Rt Hon Rishi Sunak MP, Chancellor of the Exchequer, on this point.

The old Help to Buy Equity Loan Scheme ends on the 31st March 2021 and is going to be replaced with a new Help to Buy scheme to run from April 2021. The key differences between the schemes are:

As with the current scheme, the Government will lend buyers up to 20% of the cost of a newly built home, and up to 40% in London.

The NAEA CEO Mark Hayward states, "This boom has been hugely beneficial for the housing market; however, with a stamp duty cliff edge on the 31st March, we are calling on Government to rethink these timings"

September saw a further fall in first time buyer numbers, however in our opinion this is a sign of an increase in volume of buy to let and second home movers diluting the percentage, rather than a fall in first time buyers. Landlords are buying up out of London property to attract the city leavers following the last lockdown. The potential £15,000 SDLT holiday helps them and the second home movers - if they can get completed in time.

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NAEA - Housing Market Report

Land Registry HPI

Bank of England

Ministry of Housing, Communities & Local Government