The UK’s housing market is accustomed to seasonal and economical peaks and troughs but none more so than in the year of 2020. A year no-one could have predicted and yet the property industry remains defiant and resilient against all the odds. So how did the conveyancing industry adapt in a year so different and usual?
January – March 2020
After the UK cast its vote on the EU referendum the housing market saw much uncertainty over the four years that followed while the government struggled with leadership issues and to agree on a Brexit deal.
Yet, after the country voted in December 2019 for a Conservative government to remain at the helm, January showed signs of recovery in the housing market. Referred to as the ‘Boris Bounce’ buyers and sellers that had been sitting on their hands rejuvenated the formerly stagnant market. As we previously reported, here at enact conveyancing, we also saw an uplift in our own instructions – to the tune of a significant 26%.
Unfortunately with a strong start to the year as COVID-19 became a global pandemic the initial optimism came to a standstill when the UK was put into lockdown on March 23rd.
April – May 2020
During the UK’s first lockdown the housing industry shut down. While moving home wasn’t officially banned, conveyancers were urged to negotiate with buyers and sellers to avoid all but essential property moves. This meant that completion dates were pushed back until a time where restrictions could be eased by the government.
May – October 2020
After Boris’ big announcement for the UK’s road to recovery on May 10th, the housing market was officially reopened from May 13th.
As conveyancing firms got accustomed to the market reopening, partly due to the risk of people having to self-isolate if they caught the virus or were in contact with someone who had, conveyancers, adapted their way of working by relying more heavily on ‘sims’ – simultaneous exchange and completion on the same day.
This allowed conveyancing solicitors to assess in the morning if all parties were able to complete before making it legally binding. As time passed more confidence returned the need for ‘sims’ reduced.
Once the initial pent up demand seemed to have filtered through, with so much economic uncertainty, holidays abroad either cancelled or at risk of last-minute cancellations, and still many businesses unable to re-open it seemed that a shift in priorities saw the beginning of the current ‘mini-boom’ in the property world.
What’s more, the SDLT (Stamp Duty Land Tax) holiday announced in July further intensified this artificial climate that was driving buyer demand and therefore driving house prices up. With this demand, sellers were able to sit comfortably until the right offer came along.
Since the re-opening of educational settings and many people returning to work, COVID-19 cases showed a significant rise and in England another four-week lockdown was announced on October 31st. The new restrictions which came into effect on November 5th saw many businesses close again, yet luckily for the housing market, it was able to remain open with property moves still allowed.
With the property industry still booming thanks to the stamp duty holiday, it has created a unique situation that has challenged conveyancers, mortgage lenders, local authorities, estate agents, valuers and surveyors. These essential parties involved in enabling a transaction to complete have all become overwhelmed as customers want to take advantage of the holiday before it ends in March 2021.
It has been confirmed by the Treasury that the stamp duty holiday will not be extended or tapered off at this stage. This, unfortunately, means that thousands of transactions are at risk of missing out of the temporary tax relief and in turn, could see buyers walk away from a sale.
At this stage, while the market is booming there is a real worry that when the stamp duty holiday ends transitions will fall off a cliff and therefore the housing market will see prices dip. Only time will tell what happens and how 2021 plays out, with Brexit negotiations due to go to the wire on December 31st, there is the hope that with multiple COVID-19 vaccinations in the pipeline that some sort of normality may be restored in the first half of the year.