The Stamp Duty holiday (explained here) is due to end in March 2021 - just 5 months from now. Estate agents and conveyancers around the country are working overtime to meet the surge in demand, with the biggest rise here in the South East. There are now concerns over many buyers missing the deadline, with The Times reporting a potential loss of £4 billion for the economy, and calls for an extension.
Our Head of Property, Paul Sams, offers his thoughts on the situation...
Whilst the property market is very buoyant at the moment, I have never worked in such a tough environment.
I started in property twenty years ago. I saw the rapid price growth fuelled by 125% mortgages of circa 2002, the dramatic falls of up to 30% in values in the recession of 2008 and the market really pick up after the advent of Help to Buy in 2013. The difference then was that there was no global pandemic.
In 2002 mortgage brokers were all rocking sports cars in Southampton, the Ferrari dealers did not know when the demand would end, in 2008 it was a case of those who could find cash were making a killing in the market, and in 2013 it was a scramble for every property developer to register for the Help to Buy scheme, described as "the addictive drug of the property market" to me at a conference last year.
No matter the market or economy, people could go abroad on holiday, they could see their friends, they could go to watch their favourite football team, and (perhaps more topically) they could visit their elderly parents without dressing like an astronaut landing on Mars.
The reason it is harder now is because of:
- Changing Expectations - In the past, internet shopping was not a thing. Now we can order anything and have it the same day. Society will no longer accept that things take time. Next-Day is the only acceptable delivery option.
- Working Conditions - Covid has resulted in people working from home more. This causes issues internally, leading to delays. Thankfully, our firm already enabled seamless working from home.
- The Backlog - There was never ever a stop to the market. The brakes were applied earlier this year and everything build up and the system we have for the property market in England and Wales is simply not geared up for a torrent to hit it
- Stamp Duty Deadline - There is the looming cliff edge talked up by some Estate Agents, with the stamp duty holiday ending in March 2021.
There is a real risk of another lockdown occurring, and that focuses peoples’ minds. Buyers and sellers want it now. Coupled with the above, it is a challenge. To some clients dealing with their own property, this is their everything, the most expensive thing they will ever own, and they must have it confirmed now. Amazon can get their new jumper to them the next day, so why not their dream property?
And yet, all the component parts for a property transaction are taking far longer than ever before. Surveys for mortgages are taking longer, searches are taking longer, underwriters for mortgages are taking longer, basically everything is taking longer. All these delays are fuelling panic... and panic leads to chaos. Many firms are drowning, and are now refusing new work, which is completely counterproductive. How do you explain to a client “we don’t want your business now... but we'll call you when we are desperate” ?
It would help if everyone took a breath, and realised, in the eternal words of John Lennon, that it will be OK in the end.
As a firm, we will - and always shall - continue to welcome new clients. To not is lunacy. We all need to grit our teeth and get through this, because like Covid, it will get better. I would far rather moan about being busier than normal, than worry about whether I have enough coming in to cover our costs.
My firm has incredible property lawyers, dedicated knowledgeable and incredibly hard working. I am privileged to work with them, and I consider myself extremely fortunate to have such a strong team around me through these hard times. We have supported them by hiring new talented people to try to lessen their burden, and stepped in when some have become frustrated by circumstance, to protect them from undeserved ire.
We offer that same supportive service to our clients, day after day, rain or shine, Brexit or COVID-19.
We are here when you need us (and always will be). If you have a property requirement, give us a call - we would love to help you.
Contact us today:
☎ 02380 221344
contact@duttongregory.co.uk
Video conferencing available
