1000% surge in council property searches amid homebuyer scramble to save on stamp duty
Residential property searches by local councils have skyrocketed by as much as 1400 percent, but many are taking as long as forty days to complete, as the number of requests reaches unprecedented levels driven by house hunters racing to buy and beat the end of the stamp duty holiday.
Kate Bould, a specialist in the residential property search market, says the current situation is ‘without doubt, unprecedented’, but fears the rising backlog and growing wait times for councils to process searches and information requests, poses a ‘real threat that hundreds of homebuyers will miss out on saving as much as £15,000 on Stamp Duty’.
“Some councils had already positioned themselves very well and consequently have coped with the huge upturn in the market. Typically, those that have not digitised and rely on older paper-based processes are the councils that are struggling to cope, and this is causing major delays for the home-buying process,” says Kate, who is managing director of Index West Midlands Property Information.
Latest figures show local councils are currently taking up to 42-days to return local searches on properties, but some are blaming intermediaries for the delays, which Kate says is simply untrue:
“An intermediary, like Index West Midlands, is not cumbersome, but invaluable. They deliver a good customer service, that capitalises on their hard-earned good working relationships with councils. They also have the knowledge and expertise to anticipate and navigate the current issues – this is key to the processing. We are constantly shifting to adjust to the changes, and any hurdles arising from councils that all operate and hold their data differently.”
Index West Midlands has pivoted its working patterns and resources to support the record workload:
“Our team is working literally around the clock to process and complete all the work and instructions, so we can continue to efficiently and effectively support our clients at this exceptionally busy and demanding time,” explains Kate. “We have taken on new people and introduced a ‘night shift’, so are operating an average 17-hour day to get through new instructions and review status of those already in the council system.
“We know of some councils that usually have an average of two requests for searches each week, but are now having as many as 30 search requests to process each week as sales volumes in the residential property market continue to rise,” she adds. “Our strong and long relationships with councils are helping our team get searches completed as quickly as possible.”
There are over 340 local authorities across the UK and searches are managed differently in each, so turnaround time usually takes anything from 48 hours to several weeks.
“Many local authorities only have small teams working in the Land Charges departments, so during busy periods it can take longer for them to return search results – but volumes and days to process have never been like they are now,”
“However, homebuyers already agreeing a sale are facing significant delays, with completion taking an average of 15 to 17 weeks to complete*. This timeframe presents additional challenges if mortgage offers have been on the table for a while and are set to expire, but also clearly brings into doubt whether everything will complete on time for them to benefit from the Stamp Duty holiday.
“Those about to start their property search must accept the time it will take to find their home, and complete buying it, means it’s unlikely they will get the keys before the end of March – particularly with the Christmas holiday season on the horizon, and the chances of a second lockdown growing ever likely.
“The situation is exacerbated by the short supply of and high demand for conveyancing solicitors. A number of firms have already taken steps to stem the tide, turning away new business rather than risk reputational damage, and taking the decision not to accept new purchase instructions after the middle of November.”
The volume of houses being listed for sale and the speed at which they are selling has reached record numbers since August. Based on figures released by Rightmove, September saw the highest number of sales ever agreed in a month – up 70 percent on the same month last year – and the number of active buyers is 66 percent higher than a year, and sales agreed for October up around 58 percent on the same period in 2019.
Rightmove also reports a national record in October, with the average asking price rising by 1.1% £319,996 to £323,530 in October. Prices are now 5.5% (+£16,818) higher than a year ago, the biggest rate of increase for over four years, with Rightmove now forecasting annual growth rate to peak at circa 7% by December
Houses in the West Midlands are taking an average 48 days to sell, which is the same as in London.
The Chancellor’s stamp duty land tax holiday means all homebuyers in England and Northern Ireland purchasing homes valued at up to £500,000 don’t pay any stamp duty on the purchase, so long as it is completed by 31 March next year.
Index West Midlands provides conveyancing searches, including reports and property transaction solutions such as environmental risk factors, HS2, utility and telecommunications reports, for commercial and residential property lawyers, real estate and agriculture lawyers, across Warwickshire, Worcestershire, Herefordshire, Shropshire, Staffordshire and the Black Country. For more information: https://indexpi.co.uk/offices/westmidlands.html.
*Figures from Legal & General mortgage club, October 2020