A lack of conveyancers is holding up a large number of property sales, according to recent research.
The CEO of estate agent haart, Paul Smith, notes that as a result, the amount of exchanges dropped by 14.7% in January compared to the previous month and by 7.5% compared with January last year.
Based on his own company’s data, Smith estimates that there were 50,152 exchanges in January, with an average house price of £225,914.
He reports that demand has grown by over a third year-on-year, while housing supply has increased by 8%.
Shortage of Conveyancers Putting Property Sales on Hold
Part of the surge in demand may have come from a rush of buy-to-let landlords hoping to complete on a property investment ahead of the 1st April Stamp Duty deadline.
Smith comments: “The property market in the New Year has got off to a flying start with a surge in buyer registrations and new property instructions.
“The number of new homes coming on the market is up by a healthy 8% compared to a year ago, but demand has surged by 35% over the same time period, with buy-to-let investors responsible for a large proportion of this rise in anticipation of the Stamp Duty surcharge.”
He continues: “This high level of activity has resulted in a substantial backlog of homes in the pre-completion stages, and we’re now seeing a shortage of conveyancers and lawyers to progress these sales, leading to delays and a subsequent decline in the number of completions in January.
“Across the UK, we’re now seeing more than 15 buyers chasing every property to come onto the market, and house prices have subsequently risen by 10% annually.”
How does the whole UK property market compare to London?
“London is also seeing a high level of activity and finally the issues surrounding the supply of homes is starting to ease, with a 20% increase in instructions registered compared to last year,” Smith reveals.
“In fact, supply is now beginning to outpace demand, which is up by 14% over the same time period. While this increase is very welcome, we are still seeing nearly 21 buyers for every instruction, despite the slowdown at the top end of the market.”
And how are first time buyers faring?
Smith explains: “First time buyers have started the year enthusiastically, with demand for starter homes up 26% annually. This is just the start of an upward trajectory for first time buyers, as the 3% Stamp Duty surcharge for buy-to-let investors, due to be introduced in April, will mean less competition for homes.”1
From 1st April, buy-to-let landlords and second homebuyers will be charged an extra 3% Stamp Duty on properties costing £40,000 and over. Many investors have been rushing to purchase rental properties ahead of the additional tax charge.
Tax specialists have warned about the high cost of missing the deadline.
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1 http://www.propertyindustryeye.com/lack-of-conveyancers-holding-up-huge-numbers-of-house-sales/