The outgoing chief executive of the National Association of Estate Agents is warning that the sales system continues to struggle with the volume of transactions.
Propertymark’s Mark Hayward, in a Knight Frank bulletin on the state of the housing market, pulls no punches about where the delays in the system may be - although he is not apportioning blame.
“Parts of the conveyancing market are struggling to cope” he says, adding: ”Lenders and valuers are being cautious so the time it takes to reach exchange is getting longer.”
Knight Frank data suggests that once an offer is accepted, it now takes on average just over two months before exchange is reached; and the whole process, from the sale instruction to completion, takes on average six months.
With the stamp duty holiday ending at the end of March and a two per cent SDLT surcharge for overseas buyers in place from April, the creaks in the system may start to get louder says the agency.
Hayward tells the agency that an extension to the current stamp duty holiday may be required to avoid what he calls the possible “cliff edge and chaos” after March.
The major unknown is whether a full national lockdown will once again interrupt transactions.
Hayward says that prior to the spring national lockdown, the NAEA was consulted on what that might mean for the industry. So far there has been no similar discussion this autumn.
“I haven’t had that phone call and I would expect to if it was going to happen. Every indication we have from of all parts of the country is that estate agents are continuing to operate as normal” adds the NAEA chief.
Meanwhile Knight Frank says exchanges outside of London reached an all-time high in the second week of this month.
The same week was also the highest on record for the number of offers accepted outside the capital - according to the agency this is underlining how momentum continues to build across the UK property market.
“The figures highlight an emerging incongruity as many parts of the UK become subject to tougher lockdown measures and uncertainty builds around the end of the government’s furlough scheme. This mismatch looks likely to continue” says Knight Frank.
The number of offers accepted has been running far ahead of the five-year average compared to other measures of activity across the UK. As a result, the number of exchanges is starting to rise as other indicators flatten.
In an indication of how many of these transactions may fall through, 6.7 per cent of deals that went under offer between January and June last year did not reach exchange within six months.