Why homemovers need to get ready for a marathon

14 June 2023 | Home, Property & Land | Author: Amanda Payne

Property continues to catch headlines, whether prices are up or down; city dwellers are moving to the country or back again; or how long it may take to get the keys to a new home.

The property market has seen some fluctuations in recent times, but it appears to be recovering from the 30% downturn caused by last year's mini-budget and the subsequent rise in mortgage rates. According to figures from the property portal Rightmove, the number of sales agreed is on the rebound and is currently just 11% lower than it was in 2019.

However, despite the market stabilising, there have been significant changes in the time it takes to complete property transactions. The process from listing a property to completing the paperwork and moving home has increased by 50%, now taking around 65 days compared to a year ago. The time to property exchange, which is the point when contracts are exchanged between buyer and seller, has also increased by 5% to 139 days.

This slowdown can be attributed to several factors. Firstly, there is a backlog of transactions that accumulated during the pandemic, which is taking time to clear. Additionally, the stamp duty holiday, which reduced the cost of moving between 2020 and 2022, led to a surge in transactions. Rightmove reported a 44% increase in homes sold subject to contract in June 2022 compared to 2019.

The high volume of transactions is straining various parties involved in the property buying process. Conveyancing departments are under pressure, especially considering that multiple firms are often involved in a single property chain. Other parties, such as the Land Registry (the government department responsible for registering property transactions), local authority departments, and lenders, are also experiencing increased demands.

For instance, a crucial step in the process is the "local search," which checks for any planning restrictions that could affect the property's future value. The record number of search requests has caused delays, with some local authorities taking up to a month to handle these requests. Similarly, mortgage lenders are under pressure, and securing a formal mortgage offer can now take up to six weeks.

Overall, while the property market is showing signs of recovery, the extended timeframes for completing transactions are becoming the "new normal" due to various factors, including the backlog from the pandemic and the surge in transactions caused by the stamp duty holiday.

“It may sound inconceivable, but for those hoping to celebrate Christmas 2023 in a new place, this spring is a good time to start getting paperwork in order before putting up the sale board."  

“It’s like preparing for a marathon in today’s market, as it’s not unusual for the sale process to take as long as six months, although with Fishers we are achieving around 100 days (just over 3 months).  In these conditions, buyers need to ensure they have their mortgage offer agreed, and sellers need to be well prepared before they even instruct the estate agent.  It’s this sort of approach that will make the difference between a failed sale and getting over the finish line to completion.”

Amanda Payne  Director & Head of Residential Property, Fishers Solicitors

Please Note: This is not legal advice; it is intended to provide information of general interest about current legal issues.