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With the end of the SDLT holiday just around the corner, many agents have experienced a frenzy of action as buyers push to get their transaction over the line.
Iain McKenzie, CEO of The Guild of Property Professionals, says that as expected, agents and buyers are rushed off their feet and doing their utmost to ensure that they are able to complete their property transaction before the cut-off at the end of June.
Buyers and agents driving hard
According to Guild Member Suzanne Vincent, Founder of Urban Village Homes in Denmark Hill, South East London, buyers in her area are driving sales hard, chasing their lenders and solicitors, reviewing legal documents quickly, and hand-delivering signed papers.
Vincent said: “In cases where information is incomplete and not essential to the lender or purchase; buyers are ‘taking a view’ and cracking on with the purchase anyway. Even though many solicitors are overwhelmed with sales the efficiency and pragmatic approach of buyers is genuinely helping achieve the timeline.”
Lucy Watson, Director of Borron Shaw Estate Agents in Wigan, St Helens, Orrell, Hindley and the surrounding areas, exclaims: “Wow, what a frenzy and we aren’t even there yet. We have had tears of joy and tears of pain. We have battled through the last months to get some of our high-value homes over the line and are riding the emotional roller coaster with our clients.”
She adds: “We have encountered a number of interesting situations from clients threatening to pull out of deals to clients offering to live together. It really has been stressful for all, but we hope that come 30th June we can hand on heart say we have done all we can for our clients.”
Vincent says that while none of her buyers has asked to renegotiate, some have indicated they would pull out of the deal.
“Hopefully, this won’t be the case and we will be able to get everyone through exchange and completion before the deadline. The solicitors are pulling out all the stops, us agents are helping where we can, sourcing missing documents and gathering third party information, such as missing guarantees etc. I have heard of solicitors working late into the evenings and all weekends – it’s intense!”
Demand remains high
Despite the looming SDLT deadline, demand seems as strong as ever. According to Adam Mackay from Mackay Property in Sawbridgeworth, there have been no signs of slowing down in his local market.
According to Vincent, her office has also not really seen any level of demand dropping due to the SDLT holiday. “The original stamp duty holiday was extended by three months, so the first ‘rush to buy’ happened in lockdown and the extension had seen limited new sales as the three-month sales line would be tight, especially if the buyer or sellers were in a chain. So, the second rush has been steadier, and we are seeing sales from the original stamp duty holiday spill over into the new June deadline; largely those in chains or delayed due to EWS1 certificates, which have delayed many movers,” Vincent notes.
“We have also seen an influx of first-time buyers taking advantage of the help to buy ISA and 5% deposit. Houses with nice gardens, home office space and proximity to parks are like gold dust!”
Edward Chelton Brown, Director of Chelton Brown Lettings and Sales in Northampton, says that it has been a busy six months in the area with a record number of transactions taking place and more in the pipeline than they have seen since the change in SDLT back in 2016. He adds that the newfound demand has also driven prices up by as much as 10% in the same time period, growth that they have not seen since 2006.
The high levels of demand are not localised to England. Lisa Butler from Knights Estate Agents in Wales says that the Land Transaction Tax deadline at the end of the month has influenced buyer’s behaviour with demand being very high.
Butler said: “We are finding that properties are selling within 24 hours of going onto the market, with some properties going over the asking price. We have a lot of first-time buyers trying to find their first home and a high demand in investors looking for a buy-to-let,” she adds.
What will happen after the deadline?
Mackay says that as with many other regions, his area is experiencing low levels of stock and high demand. “If this continues, I feel it will remain a seller’s market for the remainder of the year,” he notes. “I feel the confidence is there in the marketplace that prices are not going down. While money remains cheap to borrow, I feel the confidence will remain.”
Vincent says: “Steady sales, there may be a return to buy to let as many landlords have had to sell due to the heavy taxation, resulting in negative rent equity. There are lots of tenants looking for good properties, so now may be the time to invest in buy to let, if structured correctly; there is a gap in the market.”