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Timescales for completion in the private-treaty world

Monday 08 March 2021

Propertymark Industry Supplier, SDL Property Auctions, discuss how the property industry is feeling the effects of months of extreme demand, resulting in prolonged completion times and impeding estate agents’ cash flow and how agents can speed up the process and secure long overdue sales with the stamp duty holiday extension through auctions.

After Rightmove’s February House Price Index revealed that one in five buyers is still waiting to complete purchases agreed more than six months ago, going as far back as July 2020. 

Andrew Parker SDL Property Auctions Auctioneer and managing director said: “While the situation is frustrating for everyone stuck in a seemingly unmoving property chain, it is particularly distressing for those who need to sell for financial reasons or following a bereavement. Such delays also put an unnecessary strain on estate agents, who have been riding this rollercoaster for many months. They can ill afford to wait to be paid for sales which were agreed last summer.”

Various factors have impacted the housing market during the coronavirus crisis, including lockdowns changing how people use and view their homes. The stamp duty holiday boosted a new demand for countryside properties, allowing buyers to stretch their budgets further – but the sheer volume of sales put them at risk of missing the deadline.

Agents have the opportunity to use the stamp duty holiday extension as a chance to reach out to those clients who are struggling to complete their sale and offer fixed timescales for completion through a sale by auction.

Andrew added: “Selling a property doesn’t have to be a long, drawn-out process; there is another way, which is fast, effective, hassle-free – and can still be arranged through an estate agent. This is especially welcome news to those who have been waiting to complete for many months, and also to the growing number of ‘distressed’ sellers which is an inevitable result of the pandemic. When you’re in that situation, the last thing you need is more stress and hassle so auctions are the ideal solution.”

Rightmove reported in January that the time from agreeing a sale to completion was an average of 126 days – just over four months. Its latest index shows that one in five sales takes much longer, still having not completed after six months. It is a long process that can be beset with pitfalls, too. TwentyCi Property & Homemover Report showed that more than 300,000 private treaty sales fell through in 2020, an increase of 12 per cent on the previous year and Rightmove reported that in January 2021, almost a third of sales fell through.

By contrast, auction sales are fast and certain. In a conditional sale, the end of the auction signals the start of an exclusivity period of 40 working days, during which exchange and completion must take place. In an unconditional sale, contracts are exchanged at the fall of the hammer or when a Timed Auction ends. Completion usually takes place 20 working days later, unless otherwise specified in the legal pack. In both cases, the fall-through rate is less than 1 per cent.

SDL Property Auctions holds monthly live-streamed Auction Events, plus Timed Auctions on its website every day of the year with round-the-clock bidding. In addition, properties can be sold via the increasingly popular Buy It Now method.

For more information, please visit www.sdlauctions.co.uk or call 0800 046 5454.