The race to get over the line
With the end of Stamp Duty Holiday just around the corner, many agents have experienced a frenzy of action as buyers push to get their transaction over the line. Iain McKenzie, CEO of The Guild of Property Professionals, says that as expected, agents and buyers are rushed off their feet and doing their utmost to ensure that they are able to complete their property transaction before the cut off at the end of June.
Buyers and agents driving hard
According to Guild Member, Suzanne Vincent, Founder of Urban Village Homes in Denmark Hill, South East London, buyers in her area are driving sales hard, chasing their lenders and solicitors, reviewing legal documents quickly, and hand-delivering signed papers. “In cases where information is incomplete and not essential to the lender or purchase; buyers are ‘taking a view’ and cracking on with the purchase anyway. Even though many solicitors are overwhelmed with sales the efficiency and pragmatic approach of buyers is genuinely helping achieve the timeline,” she says.
Lucy Watson, Director of Borron Shaw Estate Agents in Wigan, St Helens, Orrell, Hindley and the surrounding areas, exclaims: “Wow, what a frenzy and we aren’t even there yet. We have had tears of joy and tears of pain. We have battled through the last months to get some of our high-value homes over the line and are riding the emotional roller coaster with our clients.” She adds, “we have encountered a number of interesting situations from clients threatening to pull out of deals to clients offering to live together. It really has been stressful for all, but we hope that come 30th June we can hand on heart say we have done all we can for our clients.”
Vincent says that while none of her buyers have asked to renegotiate, but some have indicated they would pull out of the deal. “Hopefully, this won’t be the case and we will be able to get everyone through exchange and completion before the deadline. The solicitors are pulling out all the stops, us agents are helping where we can, sourcing missing documents and gathering third-party information, such as missing guarantees etc. I have heard of solicitors working late into the evenings and all weekends - it’s intense!”
Demand remains high
Despite the looming deadline demand seems as strong as ever. According to Adam Mackay from Mackay Property in Sawbridgeworth, there has been no signs of slowing down in his local market. “Demand for homes is very strong, particularly in the £500,000 to £1,5 million price range. This is spurred on by the trend of buyers wanting to move to homes with bigger gardens and home office space,” he comments.
According to Vincent, her office has also not really seen any level of demand dropping. “The original stamp duty holiday was extended by three months, so the first ‘rush to buy’ happened in lockdown and the extension had seen limited new sales as the three-month sales line would be tight, especially if the buyer or sellers were in a chain. So, the second rush has been steadier, and we are seeing sales from the original stamp duty holiday spill over into the new June deadline; largely those in chains or delayed due to EWS1 certificates, which have delayed many movers,” Vincent notes. “We have also seen an influx of first-time buyers taking advantage of the help to buy ISA and 5% deposit. Houses with nice gardens, home office space and proximity to parks are like gold dust!”
Edward Chelton Brown, Director of Chelton Brown Lettings and Sales in Northampton, says that it has been a busy six months in the area with a record number of transactions taking place and more in the pipeline than they have seen since the change in stamp duty back in 2016. He adds that the newfound demand has also driven prices up by as much as 10% in the same time period, growth that they have not seen since 2006!
The high levels of demand are not localised to England. Lisa Butler from Knights Estate Agents in Wales says that the Land Transaction Tax deadline at the end of the month has influenced buyer’s behaviour with demand being very high. “We are finding that properties are selling within 24 hours of going onto the market, with some properties going over the asking price. We have a lot of first-time buyers trying to find their first home and high demand in investors looking for a buy-to-let,” she adds.
What will happen after the deadline?
Mackay says that as with many other regions, his area is experiencing low levels of stock and high demand. “If this continues, I feel it will remain a seller’s market for the remainder of the year,” he notes. “I feel the confidence is there in the marketplace that prices are not going down. While money remains cheap to borrow, I feel the confidence will remain.”
Vincent says: “Steady sales, there may be a return to buy to let as many landlords have had to sell due to the heavy taxation, resulting in negative rent equity. There are lots of tenants looking for good properties, so now may be the time to invest in buy to let, if structured correctly; there is a gap in the market.”
Chelton Brown adds that with so much in the pipeline to complete post the stamp duty holiday, in the short term he doesn’t believe we will see any great changes in the market. “With the mortgage market the way it is at present, this for me, is underpinning the strong growth in the market and will continue to do so into next year. Admittedly some sales are dependent on the stamp duty holiday, but this is a relatively small proportion with the previous extension of the stamp duty holiday helping manage people expectations and lift the burden of those who were reliant on the relief,” he says. “In the medium term, we may see a stagnation in the market, or perhaps even a small correction, as demand for property vastly outstrips the supply causing what I would consider being unsustainable increases in prices. As prices rise, buyer demand will begin to drop and in doing so will cool the market leading to stagnation following property price cycles we have historically seen,” he concludes.
