Race against time: homebuyers scramble to save on stamp duty

4 November 2020 | Investment

Residential property searches by local councils have skyrocketed by as much as 1,400% as house hunters race to buy and beat the end of the stamp duty holiday.

Kate Bould, managing director of Index West Midlands Property Information, says the current situation is ‘without doubt, unprecedented’.

She fears the growing wait times for councils to process searches and information requests – circa 40 days – poses a ‘real threat that hundreds of homebuyers will miss out on saving as much as £15,000 on stamp duty’.

“Some councils had already positioned themselves very well and consequently have coped with the huge upturn in the market,” she explains. “Typically, those that have not digitised and rely on older paper-based processes are the councils that are struggling to cope, and this is causing major delays for the home-buying process.”

The latest figures show local councils are taking up to 42 days to return local searches on properties, but some are blaming intermediaries for the delays, which Bould says is simply untrue, arguing that intermediaries are ‘not cumbersome, but invaluable’.

“They deliver a good customer service that capitalises on their hard-earned good working relationships with councils. They also have the knowledge and expertise to anticipate and navigate the current issues – this is key to the processing. We are constantly shifting to adjust to the changes, and any hurdles arising from councils that all operate and hold their data differently.”

According to Bould, there are over 340 local authorities across the UK and searches are managed differently in each, so turnaround time usually takes anything from 48 hours to several weeks. “Many local authorities only have small teams working in the Land Charges departments, so during busy periods it can take longer for them to return search results – but volumes and days to process have never been like they are now,” she says.

“However, homebuyers already agreeing a sale are facing significant delays, with completion taking an average of 15 to 17 weeks to complete. This timeframe presents additional challenges if mortgage offers have been on the table for a while and are set to expire, but also clearly brings into doubt whether everything will complete on time for them to benefit from the stamp duty holiday.”

Bould says those beginning their property search should accept that it’s unlikely they will get the keys before the end of March – particularly with the Christmas holiday season on the horizon and the short supply of, and high demand for, conveyancing solicitors.

The volume of homes being listed for sale and the speed at which they are selling has reached record numbers since August. Based on figures from Rightmove, September saw the highest number of sales ever agreed in a month (up 70% on the same month last year), and the number of active buyers is 66% higher than a year ago, while sales agreed for October is up around 58% on the same period in 2019.

The portal also reports a national record in October, with the average asking price rising from £319,996 to £323,530 in October, a growth of 1.1%. Prices are now 5.5% (+£16,818) higher than a year ago, the biggest rate of increase for over four years, with Rightmove now forecasting annual growth rate to peak at around 7% by December.

This post has originally been featured in Property Investor Today.