“It can really help to pre-empt what could go wrong and cause delays and have that conversation with buyers upfront.”
Residential property professionals across the breadth of the chain are feeling the pressure of increased volumes brought on by the Stamp Duty holiday. Yet, according to the latest tm:tv panel debate ‘Is the property market faking it?’, buyers and sellers could help reduce the pressure by taking proactive steps to manage their transaction. Hosted by Emma Vigus, Managing Director of mio, this sentiment was echoed throughout the tm:tv session by estate agent, conveyancing, surveying and mortgage broker representatives.
The market is moving again, but the biggest challenge is getting sales to completion
Compared to 6 months ago, when the panel first met, the market is in a far better place. The general public have adjusted to social-distancing restrictions and are more confident about allowing surveyors and estate agents into their homes (some are even starting to request face-to-face meetings), and, encouraged by the Stamp Duty holiday, people are moving again.
The biggest challenge is in getting sales to completion.
The industry is busier than ever. Even ‘The Big 6’ lenders are struggling under the weight of mortgage applications, with some receiving approximately 1,500 applications a day, but only being able to process 500 – resulting in a backlog and delays.
This is exacerbated by how much more complex and time-consuming the process has become, as Greg Cunnington, Director of Lender Relationships and New Homes at Alexander Hall commented: “It’s really different! Mortgages were more straightforward before lockdown and, thanks to technology and prompt surveyor inspections, getting a mortgage offer in 5-10 days was quite normal. However, it now takes 12-18 days just for buyers to get an initial assessment with some lenders, and if there’s any hiccups along the way, it only adds to the delay. Lenders are also doing more manual assessments to counteract the increased risk of lending to people who are self-employed and currently on furlough, so that’s also adding to the delays.”
It’s not just the mortgage application process that’s taking extra time. Other key players in the market are feeling the strain too, as Joe Arnold, Owner, Arnold & Baldwin Chartered Surveyors said: “We’re experiencing capacity issues with managing this new, heavy workload. We’ve brought everyone back from furlough and it’s still not quite enough, but we’re reluctant to take on new people as we just don’t know what’s around the corner. Unfortunately, it’s created a backlog of work, as where we only used to require 2-3 days’ notice to go out and do a mortgage valuation or survey, there’s now a 3 week wait.”
Being proactive and managing expectations is key to keeping things moving
Unfortunately, the majority of buyers are unaware of just how much the home-moving process has changed behind the scenes, and so the onus is on property professionals themselves to help their clients better understand where they could be more proactive – for the benefit of all involved.
• Mortgage applications need to be qualified asap: “Buyers should have a Mortgage Decision in Principle before they view any properties.” – Greg Cunnington, Director of Lender Relationships and New Homes at Alexander Hall.
• Pre-empt delays and reassure clients as much as you can: “It can really help to pre-empt what could go wrong and cause delays and have that conversation with buyers upfront, so if and when things do go a bit slower, at least it’s expected and a bonus if it actually comes in that bit quicker. Estate agents also need to step up with their communications to help reassure buyers that things are moving forward.” – Perry Power, Manging Director, Power Bespoke.
• Clients need their professional team in place from ‘Day 1’: “Homebuyers need to get their professional team alongside them as soon as possible – including their mortgage broker and surveyor.” – Joe Arnold, Owner, Arnold & Baldwin Chartered Surveyors.
• Buyers need to be completing their AML checks before even looking at properties: “Buyers should be instructing their conveyancers before they start looking at properties, as AML and title checks take time, and can cause delays later on. Unfortunately, we often find buyers are reluctant to spend the money up front, when the truth is that in the grand scheme of things, it really isn’t that much, and would relieve a lot of the pressure on conveyancers and the property transaction as a whole.” – Yanthe Richardson, Senior Associate, Foot Anstey.
It’s an understatement to say that the industry is continuing to face unprecedented challenges as we approach the end of 2020, but proactivity, communication and collaboration will be key to keeping things moving. Are you playing your part in keeping property transactions moving?