House price boom could be derailed by ‘perfect storm’ of collapsed sales

Buyers risk missing the Help to Buy and stamp duty deadlines. Nearly one in four agreed sales has collapsed so far this month.

The property market is being strangled by its own “mini-boom” as logistical delays mean buyers are increasingly pulling out of sales.

The summer surge in buyer demand combined with reduced processing capacity after lockdown means that lenders, local authorities, conveyancers and surveyors are overwhelmed. Sales are at serious risk of being dragged beyond the stamp duty and Help to Buy scheme deadlines at the end of March.

Andrew Boast of SAM Conveyancing solicitors warned that local authority searches that would normally take one to three weeks now often take two months. Meanwhile, surveys that before the pandemic could be booked for the following working day now need to be secured up to four weeks in advance. 

Legal & General Mortgage Club now estimates that the average sale takes 15 weeks from start to finish. As many as 200,000 buyers may miss the stamp duty holiday deadline as a result.

Andy Soloman, of Yomdel, a firm that tracks property market sentiment, said the delays mean: “There is a ticking time bomb of withdrawals that will affect the market going forwards.” Fast approaching deadlines mean the market faces a “perfect storm”, he added.

Sales are increasingly falling through

The longer a transaction takes, the more likely it is to fall through, particularly given the pandemic’s effect on job security and changing restrictions, said Mr Boast.

The number of collapsed sales is rising fast. In July, 17pc of agreed sales fell through, according to data from property website Rightmove. The number has been rising steadily. So far in October to date, the share has jumped seven percentage points to 24pc – effectively one in four sales.

By Melissa Lawford, please read the full article on The Telegraph.