Confidence is strong in many parts of the UK as home movers remain committed to their plans to move. But could the current backlog of property transactions mean that many buyers won't actually complete their purchase before the end of the Stamp Duty Holiday?
Figures from property search portal Rightmove point to new record highs in asking prices, which are now on average 5.5 percent higher than the same time a year ago. As of the beginning of October, the average asking price was £323,530, an increase of 1.1 percent from £319,996 in September. It’s worth bearing in mind, however, that these are asking prices, not sold prices.
Nonetheless, as a result, Rightmove are forecasting that annual house price growth will hit a peak of seven percent by December.
That’s the positive news. If you’re selling a property, of course.
The potentially not-so-great news is that there is such a significant processing backlog as property lawyers, mortgage lenders and surveyors grapple to clear what’s believed to be over 300,000 property transactions which were placed on hold during lockdown, together with the ‘mini boom’ in sales agreed since the announcement of the Stamp Duty Holiday scheme in July, that buyers who have their offers accepted from this month onwards may find that they don’t actually complete on their purchase before the end of March next year.
Managing Director of Enness Global Mortgages, Hugh Wade-Jones observed: “The one downside to such monumental market activity is the frustrating situation many buyers are finding themselves in at the back end of the transaction process.
“Having had an offer accepted in extremely hot market conditions, it’s now taking months on end to see that offer move through the legal process to completion.
“So, while many agents may find themselves in the extraordinary position of having more stock sold subject to contract than they have for sale, the ratio of actual homes sold is probably telling a slightly different story.”
Hugh concluded: “As a result, the reality of market conditions is probably a tad more muted than we are being led to believe and so while the time it’s taking to list a property as sold may have accelerated, actual sale times aren’t particularly quick.”
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