Buying surge sees 400,000 home sales in backlog
According to analysis by Zoopla, there are 50% more homes progressing through the sales system than this time last year following record high sales agreed after the housing market was unlocked in mid-May.
New sales agreed were up 9% year-on-year in June, growing to 42% in July, and peaking at 62% in August leading to 140,000 more transactions in the pipeline compared to this time last year.
Following the purchasing spike, Zoopla estimates there are currently 418,000 sales in the pipeline which are yet to complete worth £112bn.
The 50% rise in agreed sales is expected to heap more pressure on already stretched banks and conveyancers causing completion delays and the risk that some buyers may miss the 31 March stamp duty holiday deadline.
Chancellor Rishi Sunak has temporarily scrapped stamp duty on the first £500,000 of the purchase price of main homes until end of quarter one 2021 to stimulate the housing market and economy after the lockdown months.
Zoopla estimates it is taking just over 100 days from sale agreed to completion and to be in with a chance of beating the stamp duty deadline a sale should be secured before Christmas. Of sales agreed in early 2021, just a quarter will complete in time.
Property data analysts TwentyCi said the sale agreed to completion process is taking much longer and with a 50% rise in business, more than 300,000 transactions agreed between 20 September and January will miss the deadline because conveyancers lack the capacity to cope with the surge of buying and selling activity.
TwentyCi estimates the current turnaround time is 163 days and warns it could get longer as transactions continue to mount and the sector slows down for a Christmas break.
The firm said movers should agree sales by the end of October to cash in on the stamp duty saving.
Richard Donnell, research and insight director, Zoopla, said: “There is a sizable pipeline of business for the property, lending and conveyancing industry to convert into completed sales before Christmas and into Q1 2021.
“The stamp duty deadline will focus the minds of committed movers in the near term, which will support sales volumes and make for a strong first quarter of sales completions in 2021.
“Those who leave it to January to start their search for a home will be cutting it fine – just half of sales agreed in January will convert into a completed sale by the end of March so those looking to beat the stamp duty deadline will need to be well prepared.
“Finding an agent before Christmas and instructing a conveyancer to prepare all the sellers legal information will be essential to boosting the chances of saving up to £15,000.”