Conveyancing timelines increase for home buyers
The property market is always making headlines, whether prices are rising or falling, people are moving from the city to the country or back again, or the length of time it takes to get the keys to a new home.
After the 30% decline in the number of sales agreed in the aftermath of last year's mini-budget, when mortgage rates skyrocketed, there were concerns that double-digit inflation and the cost-of-living crisis would permanently dampen the property market. However, the latest figures from the property portal Rightmove suggest that the number of sales agreed is rebounding and is only down 11% from 2019. Additionally, Hunt's announcement that the UK may avoid a full recession is positive news.
Although the property market may have slowed, it appears that the timeframe from putting a property on the market to completing the paperwork process and moving home has slowed down as well. The time it takes to agree on a prospective sale has risen by 50% to 65 days compared to a year ago, and the time it takes to exchange contracts is up 5% to 139 days, according to property data specialists TwentyEA.
Several factors could contribute to this slowdown. The market has had to deal with a massive backlog that arose during the pandemic, in addition to a surge in demand due to the stamp duty holiday that reduced the cost of moving from 2020 to 2022. According to Rightmove, there were 44% more homes sold subject to contract in June 2022 than in 2019.
Many conveyancing departments face pressures compounded by several different firms likely to be involved in any individual property chain, as well as those involved in the many connecting strands of sale and purchase. During a typical property transaction, pressure can come from any party involved in the purchase or sale, and it can also include the Land Registry, which is the government department responsible for registering property transactions, local authority departments, and lenders.
Whenever a property is purchased with a mortgage, the buyer will need to have several "local searches" carried out to check for planning restrictions or enforcement notices that could affect the property's future value. A record number of search requests has put extra demand on the process, and many local authorities are taking as long as a month to handle these requests. Similarly, mortgage lenders can take up to six weeks to issue a formal offer.
Laura Cartwright, Head of Conveyancing said, "It may sound inconceivable, but for those hoping to celebrate Christmas 2023 in a new place, this spring is a good time to start getting paperwork in order before putting up the sale board. In these conditions, buyers need to ensure they have their mortgage offer agreed upon, and sellers need to be well prepared before they even instruct the estate agent. This sort of approach will make the difference between a failed sale and getting over the finish line to completion."
For sellers, preparation includes checking the location of any relevant deeds and conveyancing documents from the original purchase. While most properties are held by the Land Registry as an electronic entry, old deeds may contain detailed information that does not appear in the Land Registry records. Any property that has not changed hands for many years may need to be subject to a digital registration, requiring the original deeds.
Other essential paperwork covers any modifications to a property that required planning permission or building regulations consent. Certificates will be required to show that these aspects have been followed and satisfied. For leasehold property, any works requiring approval by the freeholder will need to be documented as well.
Any electrical or gas work will need a certificate to show that the work has been properly carried out in accordance with applicable regulations by a suitably qualified technician. Similarly, new oil boilers or oil tank installations should have an OFTEC certificate, and new windows should have a FENSA certificate.
Laura added: “Sellers who are ready before they market will make sure their solicitor has already examined the title, lined up all the paperwork, anticipated any problems and dealt with them in advance. It’s a tactic that avoids delay later and means they are ready to act immediately when a buyer is found.
“And for those chasing the perfect property, with a continuing shortage of new instructions coming onto the market, make sure you are the best bet, not just the highest offer. Sellers will choose the safe option to keep their move as smooth as possible. Buyers who instruct solicitors, get their finances in order, mortgage offers confirmed and even go into a rented property so they are chain-free and flexible on completion dates, will show sellers they are serious.”