Rightmove Says 650,000 Homes Will be Sold Across Britain
According to the website Rightmove, about 650,000 homes will be sold in Great Britain. This unprecedented surge in real estate sales is occurring despite the second lockdown. The new trend emerged as a result of the stamp duty holiday recently introduced by the government. The holiday will last until March 2021 and all first home purchases under £500,000 (in England) and £250,000 (In Scotland and Wales) are eligible to apply.
Initially, after the government announced the holiday the real estate market did not boom instantaneously. However, as soon as the regulations were explained people started searching for and buying, new homes. This trend continues into the second lockdown. Furthermore, people are allowed to go to house viewings and do home moves if they follow social distancing rules and wear protective gear.
Rightmove claims that the agreed sales for this October show an increase of 50% year on year. Furthermore, this figure got up to 72% in east England. Even though these figures are positive, two issues are emerging because of the rapid increase in house sales. As for the home prices, the data from Rightmove shows, asking prices are up 6.3% in comparison to November 2019.
Longer Waiting Periods
The tax break is the main force-generating this increase in market activity. However, that also means that the balloon is limited to a certain time frame. In this instance that is until the end of March next year. As a result, all the people that want to use this opportunity are making home purchases at the moment. That means that convenience solicitors are under pressure from the dramatic increase in their workload. In turn, it takes longer for all the paperwork to get processed and this increases the time it takes to finalise the transactions.
Will the Holiday be Extended?
The second issue is linked with the first. The solicitors in charge of finalising home purchases are under pressure to finish all their work by the end of March. That is, the work they have now and the new transactions that will occur in the following months.
One possible solution that may aid in resolving this issue is an extension of the stamp duty holiday. This would give people more time to finish their home purchases and it would put less pressure on the soliciting lawyers. However, at the moment, there is no indication that the government will introduce an extension.
David Greene, speaking on behalf of the conveyancing solicitors, warns of the fact that the stamp duty holiday will expire during the Easter holidays. This period is traditionally busy for the real estate market because people use it as an ideal time to move to a new home. Furthermore, it also marks the end of the help-to-buy scheme in its current form.
Greene proposes an extension of the stamp duty holiday or an introduction of appropriate transactional agreements. Both these approaches will help release the pressure currently experienced by the solicitors.
What will be the final solution? There are still no indications of the approach the government will take. Currently, the priority is to get through the winter phase of COVID-19 and the second lockdown. After the situation normalises there will be more space to talk about the stamp duty extension.
At the moment it is important to understand that the real estate market is creating a backlog of work from all the new transactions. Together with the lockdown and general social distancing, all processes are slower. The best solution is to practice patience and to stay on top of your paperwork at all moments. That way you will be quick to respond and finalise the home-buying process.