The recent boom in the housing market has been widely reported and the catalyst is most often cited as the government’s stamp duty holiday which promises buyers a discount of around £15,000 if they complete a home purchase before March 31st, 2021.
With this Spring deadline fast approaching, the race is now on to complete purchases as time runs out. The bad news is that purchases are now taking longer than usual to process due in part to the backlog created by rising demand. But there are other factors at play, too.
Here’s a list of the main culprits causing significant delays in the home buying journey, all of which could threaten your chances of meeting the stamp duty deadline.
As mentioned, the increased demand on the housing market is causing a significant backlog as the industry wrestles to process an unprecedented number of sales. The main problem is surveyors, or rather a lack thereof.
There is too much demand and not enough surveyors, especially when we account for those surveyors who have either been furloughed, are sick, or are having to self-isolate. This is having a dramatic impact on mortgages as lenders are struggling to find enough surveyors to value properties.
While this problem is, in some ways, unavoidable right now, the effects can be mitigated by appointing a surveyor as early as you possibly can, and certainly before you put in an offer on a home.
Local Authority Searches
Your solicitor/conveyancer is responsible for requesting a Local Authority Search during the conveyancing process. This is an essential task which enables you to obtain any information about upcoming or planned public works which might have an affect on the property you are hoping to buy. This includes any new roads which might pass through, near, or around your land, and any nearby sewer work.
Some local authorities are returning these searches within two days of being requested, but many are taking much, much longer, especially with the increased demand. In fact, new research suggests that some councils are taking up to 42 working days to return a search.
Councils with longest delays in returning local authority searches:
- Melton Borough Council, Leicestershire (42 days)
- Tameside Metropolitan Borough Council, Greater Manchester (35 days)
- Chelmsford Borough Council, Essex (35 days)
- London Borough of Hackney (30 days)
- West Lindsey, Lincolnshire (30 days)
- Bridgend County Borough Council, South Wales (30 days)
- Wealden District Council, East Sussex (30 days)
- Wiltshire Council, South West (30 days)
Management companies of leasehold properties
If you’re buying a home with a leasehold, your solicitor will have to contact the management company to obtain their ‘memorandum and articles of association’, as well as their accounts over the past three years.
You should alert your solicitor to the fact that the property is a leasehold from the very beginning so that they can start the necessary processes as soon as possible. Today, with many management companies suffering staffing shortages, closures, and increased demand, this is more important than ever.
Our old nemesis, The Chain, is here again. Chains have long been a problem in the UK housing market because when you have multiple different home purchases all dependent on each other for success, chains can, and often do, break without warning.
But even if we’re lucky enough for our chain to stay together, it can still create frustrating and costly delays. This is especially true if all of the parties within the chain are working to different timelines.
For example, one local authority may return their search within a week, while another takes two months, but because the two properties are linked by a chain, everyone is essentially tied to the slowest authority.
Even without mismatched timelines, the chain can be a slog simply because delays or mistakes from one party have knock-on effects for all other parties, slowing down the purchasing journey for everyone. Something as simple as poor communication between one person in the chain and their solicitor can screw it all up for everyone.
And don’t forget, all of the potential delays you face with your purchase are also faced by everyone else in the chain.
Securing a mortgage
Securing a mortgage is central to a speedy purchase. Failure to do so in a timely manner can create all sorts of delays for you and everyone else in your chain. Securing a mortgage is taking longer now because of the aforementioned shortage of surveyors and because the lenders themselves are short-staffed while applications come in thick and fast. In so-called normal times, banks usually come back to you with mortgage offers within 7 days. With all that’s going on, however, they’re taking up to 20 days.
But even without all of these Covid-related delays, mortgages can still cause a blockage. To combat this, you must start the process of securing a mortgage as soon as you reasonably can. Getting one secured ‘in principle’ before placing an offer on your desired home can go a long way to minimising delays.
Is your home purchase suffering from frustrating delays? We’d love to hear your story, especially if it helps us add more depth to this article in order to help our community get their purchases processed quickly. Drop us a message in the comments section below.