Surge in activity leading to delays in the transaction process


02/03/2016

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by Paul Smith, CEO of haart estate agents

This year has certainly got off to a flying start with our most recent Housing Market Monitor showing a surge in both the level of demand and the supply of homes coming onto the market. While the number of new homes rose by a healthy 8% compared to a year ago, demand outpaced this with a 35% increase over the same time period. This follows a rise in the number of buy-to-let investors entering the market in anticipation of the 3% stamp duty surcharge due to be introduced in April.  

As a result, we’re now seeing more than 15 buyers chasing every property to come onto the market across the UK and house prices have subsequently risen by 10% annually. This is supported by the most recent Land Registry data. While this high level of activity portrays a more liquid property market and is certainly positive for those looking to sell their home, it has resulted in a substantial backlog of properties in the pre-completion stages, and we’re now seeing a shortage of conveyancers and lawyers to progress these sales. This in turn has led to delays and a subsequent decline in the number of completions in January.

Our data also shows that there has been a rise in the number of first-time buyers, which are up 26% annually. Although first-time buyers are currently in hot competition for properties for with buy-to-let investors seeking to complete their purchase before April, I believe that once the surcharge comes into place first-time buyers will have the upper hand and will continue their positive upwards trajectory for the rest of the year. The year ahead looks set to be a good one for first time buyers.