Almas Uddin
Founder and Mortgage Advisor
01 Dec 2020
As we've previously reported, following a housing market slump after the initial lockdown began in March, sale prices have soared, and completion volumes have seen a fast return to record-high levels.
One of the primary reasons for this is the Stamp Duty 'holiday' announced back in July.
In a nutshell, that holiday means you can buy a residential UK property Stamp Duty-FREE up to the value of £500,000.
Investors still have to pay the second property tax - but still, this represents a tremendous saving on the regular cost of expanding your portfolio.
Homebuyers have also flooded the market, with many city residents searching for homes in more rural locations as the value of outside space and fresh air becomes more important.
However, as we launch into the final leg of 2020, time is short to complete a purchase before 31st March 2021. As investors fall away, not willing to risk a sale not going through in time (and potentially costing up to £15,000 more!), it seems like an opportune time to buy.
The Advent of the End of the 2020 Stamp Duty Holiday
Listing prices are dropping, and sellers are offering bargain prices to try and shift properties for sale just in time.
While somewhere around 650,000 transactions remained pending in October 2020, Right Move reports a drop in prices of 0.5% between October to November.
Here's why:
- Sellers will usually wish to achieve their asking price - with the usually anticipated negotiating notwithstanding.
- If you reduce the listing price of an existing property, buyers may give it a second look, seeing that the price has decreased.
- Being able to accept an asking price offer instantly means that the negotiating period is vastly reduced, and there is better potential to complete in the next four months.
The other challenge is that mortgage brokers have been equally swamped - and with applications taking longer to process, it's a race to the finish line for many buyers.
That said, dropping prices within a feasible window of completion makes for an extremely attractive proposition - with the big IF being whether you'd be able to get the sale through, and all the paperwork completed, before the end of March.
So, the critical question is: how can you complete on a house purchase quickly?
Five Ways to Speed Up Your UK Property Purchase
The average property purchase takes around 18 weeks, which is about 4.5 months, so it might seem that 31st March isn't too tight a deadline.
However, that's an average, and there are multiple reasons why a purchase might take significantly longer:
- Being part of a chain and waiting for another member to sell their property or find a home to move into.
- Delays with valuations, surveys, solicitor's paperwork or collecting signatures.
- Any queries that arise around title deeds, party walls or perimeters, for example.
- Mortgage application processes - which in complex scenarios can take several weeks.
- Protracted negotiations around the sale price, what fixtures or fittings might be included, or remedial works required.
It's safe to say that in the current climate, it's in everybody's best interests to complete a transaction quickly. Sellers will want to get their property sold, move on, and achieve a reasonable price before the market dips, as is anticipated to happen next year.
Buyers want to secure their new property and save thousands of pounds on stamp duty before the window of opportunity closes.
Here are the top five recommendations from the Revolution Brokers team to get your ducks in a row for a fast, efficient property purchase:
1. Be Ready To Move With Your Finances
Delays in financing are one of the most common reasons for a property sale to be left pending. Mortgage applications can take weeks, and with lenders overrun with applicants, there is a slim chance your bank will be able to approve an application and release funds quickly.
The ideal solution is to work with an independent, experienced, whole-of-market broker. Revolution deals with multiple types of mortgage, with open access to every lender and product on the market. We help you move quickly, assist with collating your application documents, and present a compelling application backed with our reports to expedite the approvals process.
When you are looking for a mortgage slightly outside of the norm - for example, you are self-employed, have just started a new job, or are buying a thatched roof property - it is vital to use a broker. High street banks are unlikely to be able to help and, if they can, it is likely to take far too long to get everything in place.
Give us a call on 0330 304 3040 or drop a message to [email protected] and we'll work to get you an Agreement in Principle in place, so you're ready to move without delay.
2. Think About Surveys, and Book them in Advance
Surveys are an essential part of buying a property, as you'll need it professionally valued to make sure it acts as sufficient security for your mortgage.
In some cases, valuations are being carried out on a 'desktop' basis, without needing to book a physical appointment - this depends on the value and type of property, but can be much faster than waiting for a surveyor to have an available slot.
Chat with us about streamlining this process. Your mortgage provider will need a valuation, but you'll also need a homebuyer’s survey, and combining both of those inspections will save time and money.
It's also worth booking a slot with a surveyor as early as possible. They are equally busy, so having your space reserved will mean you're not left waiting for weeks to be able to complete.
3. Avoid Buying in a Chain
A good estate agent will be able to identify chain-free properties; those where the seller is looking for a fast sale, or where there is a chain, but it's ironclad and good to go.
The last thing you need is to find your ideal property, have an Agreement in Principle and surveys completed, but be left hanging for months whilst another member of the chain finds or sells their own home.
Some chains can move smoothly, but if you're looking to complete in just under four months, it's best avoided if you can find a suitable property.
4. Be Creative in Your Approach to Problem Solving
Many of the typical delays with completing a house purchase relate to issues with the property, negotiations about who is going to carry out work, or deciding on the cost burden of repairs that might be required.
It's worth being pragmatic about how much you want to complete quickly, and what the actual monetary value is of those negotiations, rather than continuing an argument out of principle that could cause lengthy delays.
For example, suppose there have been changes to the property without planning permission. In that case, this might be something you'd typically flag as a concern, and wait for the existing owner to secure retrospective permission, or documentation confirming a PD exemption before you are willing to proceed.
That can take a long time, so perhaps the seller could agree to take out insurance against any potential enforcement action, or apply for retrospective permission while the rest of the process takes place to put your concerns at ease and make sure the sale can proceed.
5. Work With a Recommended Solicitor Who Can Act Fast
Every purchase or sale will need a solicitor's involvement or a conveyancer. If you have already instructed a solicitor, paid their retainer, and confirmed they could act quickly when you are ready to proceed, you can shave off a considerable amount of time.
You'll want a solicitor with a good reputation, who you are confident has the right experience and is willing to expedite the process to ensure you can complete before the stamp duty holiday ends.
We hope these tips are useful; and are always on hand to help if you need any advice about finding ways to finance a property purchase quickly!
The key is to be organised, proactive, and to carry out each step of the process as early on as you can so that when you've found your ideal property and are ready to buy, you are in a perfect position to get moving fast.
For more advice about fast financing options, or securing an Agreement in Principle, contact Revolution on 0330 304 3040 or email us at [email protected] to schedule a good time for a call.
Contact us now to discuss your personal options, Revolution Finance Brokers specialise in commercial and residential finance in Essex, Kent, London and Hertfordshire.
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