Author: Antony Antoniou

A new survey of prime London property shows 21 per cent of homes on sale have had their asking prices cut – sometimes dramatically.

Specialist mortgage broker Enness Global looked at stock levels across London’s most highest value neighbourhoods for homes at £3m and above.

It then analysed what percentage of these homes had seen the asking priced reduced in order to secure a buyer.

Across London, 21 per cent of all properties at £3m or above have seen a reduction.

Maida Vale is the area with the highest share of reductions – 38 per cent.

Hampstead, St James’s and Pimlico also rank high with 31 per cent of prime property stock reduced.

However, Soho and Fitzrovia both saw fewer than 10 per cent of properties cut asking prices.

“A combination of Brexit uncertainty and the current pandemic has seen many sellers reduce their asking price expectations in order to secure a sale” says Islay Robinson of Enness Global.

“When you couple this with the current stamp duty savings on offer and the weaker pound, the prime London market presents a very attractive option at present.

“Of course, not everywhere presents a property discount and those with the smallest percentage of price-reduced properties indicate where the London market is currently at its hottest where high-end homebuyer demand is concerned.”

A digital resource hub for estate agents launches a new product today, claiming to shorten transaction times.

Sort Move, which has been operating for the past year, claims its new Fast-Start service allows sellers to become ‘Sale Ready’ by completing conveyancing paperwork online as soon as a home goes on the market.

The product allows clients to fill in documents via a desktop, tablet or mobile device. It also packages Biometric ID and AML checks, as well as digital signatures on all completed paperwork.

The product has undergone beta-testing with some agencies whose testimonies have been released to the media.

“This enables sellers to sign up as soon as they put their property on the market, complete ID checks and preliminary forms and paperwork to be ‘contract ready’ as soon as a buyer is found” says Nicholas Webber of Westcoast properties.

“I can do these quotes, tailor them to each client, include my own branding and offer them a unique platform. I love the updates I get for sales going through and also the incentive is very good for each file completion” according to Leanne Fuller O’Grady of Fuller O’Grady estates.

Sort Move – created by Sort Ltd, which works in the mortgage intermediary market – describes itself as “a digital portal specifically with estate agents and their clients in mind.”

It says its products “add value to the customer journey and provide another income stream for the agent, through fair and transparent referral fees. These products are backed up by a hand-picked panel of quality conveyancers, seamless partner integrations and a support team of home move advisers.”

Today sees the government’s Spending Review, with Chancellor Rishi Sunak taking centre stage as he presents a 12 month spending plan to MPs.

Although traditionally such spending reviews are not opportunities to change taxes – that’s reserved for the annual Budget, which is not scheduled until next year – there has nonetheless been widespread speculation about possible reform of the Capital Gains Tax system.

Now industry commentator and property management company owner David Alexander is calling on Sunak not to tackle CGT, which could risk “unmprecedented negative impact” on not just the rental sector but the wider housing market.

A recent report commissioned by Sunak advocated CGT rises to match income tax rates.

Alexander argues that for investors, given their additional stamp duty costs, such a CGT change would effectively deter future purchases.

“While the Spending Review is not the time when the Chancellor will announce any tax hikes it is clear from the Treasury’s messaging over the last week that increases are coming next year” he says.

“CGT seems set to be top of the list for substantial increases and there is little doubt that landlords, second home owners and property investors are firmly in Rishi Sunak’s sights. He sees this as an easy target politically and financially. Unlike many other assets property can’t hide and as CGT affects a relatively small part of the population it looks like an easy fix for the enormous debt accrued during the pandemic.”

Alexander is warning that if Sunak widens the take and breadth of CGT the number of people liable will rise and landlords with one or a small number of properties will be drawn into the tax.

“The targeting of the tax may have unintended consequences. Equally he will understand that simply increasing a tax by a certain percentage rarely results in a directly comparable increase in revenues. The larger institutional investors will always have the option of shifting their investments elsewhere either geographically or into a different asset class resulting in a lower tax take” he warns.

Alexander says larger investors may be able to absorb the changes, or use their accountants to minimise the disadvantage, but that would not apply to smaller scale investors who have purchased one or two buy to lets.

And he warns: “A property used to shore up retirement funds, or care home fees, could suddenly be hit by a tax which is imposed with little warning, on a sector that is exposed, at a time when the market is potentially fragile.”

Agents should know in the next 36 hours how new Coronavirus restrictions will affect how they work.

The Prime Minister is announcing tougher Tier restrictions to operate from the end of the England lockdown on December 2.

Under the current England-wide lockdown agents have been able to work in branches but without widespread visits from members of the public; sales and house moves have gone ahead, under existing social distancing and safety guidelines.

10 Downing Street has already confirmed ahead of Boris Johnson’s announcement that after December 2 more areas of England are set to be placed into higher tiers than before to keep the virus under control, with specific tier rules strengthened to safeguard progress on reducing the infection R rate achieved during the lockdown.

It is not yet clear exactly how restrictions could affect the housing market, although the Ministry of Housing, Communities and Local Government says this is likely to be set out later today or tomorrow.

Changes made to the overall Coronavirus restrictions will be discussed in Cabinet again this morning and then announced to MPs today or tomorrow; later this week the proposals will be voted on by Parliament.

The BBC suggests that the key verdict on which areas of the country will fall into which Tiers will be revealed on Thursday of this week.

In Scotland over the weekend some areas moved into what the Scottish Government calls Level 3 and Level 4 measures.

Under those, house moves and other activities related to the property market can continue but must be carried out safely, referring to that country’s Coronavirus guidance at all times.

At Level 4 people can work in other people’s homes, but this should only be to provide essential services, which can include an estate agent visiting or a house move going ahead.

However this is only if the occupier is well and is not showing Coronavirus symptoms and neither they nor any of their household is self-isolating. Social distancing must also be observed.

NAEA Propertymark says: “In [Scottish] areas at Level 4, tradespeople can continue to work in other people’s homes, but should only provide essential services including urgent repairs and maintenance, and work to support a home move, for example, furniture removal.”

It may make little difference to agents but a leading analyst suggests thousands of buyers have effectively lost money on their purchase – even if they complete in time to secure the full stamp duty holiday saving.

PropTech analyst and market commentator Anthony Codling, in a post on his website Twindig, says since the announcement of the stamp duty holiday, house prices in 67 of the 380 areas reported by HM Land Registry have risen by an average of more than the maximum SDLT saving possible.

The 20 locations where typical house prices have risen in excess of the largest possible stamp duty saving are, unsurprisingly, in relatively affluent areas.

The top four, for example, are Hammersmith & Fulham, Kensington & Chelsea, Islington and Hackney, all in London and all with house price hikes of over £50,000 in recent months against a maximum stamp duty saving of £15,000.

The London boroughs of Brent and Ealing also make the top 10 as does Rutland, Oxford, Cotswolds and in Devon the South Hams.

However there are considerably more locations where buyers have genuinely made savings, despite rapidly rising prices.

The top 10 ‘winning’ areas include the City of London, Westminster, Camden and Richmond, all in London – the City of London in particular is a windfall for buyers, as Codling reports that the average house prices there has plummeted almost £80,000 since early July.

The director of a conveyancing technology company has hit out at what he calls “an over-reliance on outdated processes” and “age-old search delays” for hold-ups in processing transactions in the housing market.

Andy Sommerville, director of Search Acumen, says the now well-publicised combination of pent up demand from the spring lockdown and the stamp duty holiday have presented conveyancers with challenges.

Sommerville says the SDLT deadline of next March, in particular, has meant that public bodies have been swamped with requests.

And in a strongly-worded statement he says this has meant organisations including local councils and HM Land Registry have struggled to keep up.

He says: “Further, an overreliance on outdated processes has meant that age-old search delays are rearing their ugly head – slowing down the transaction process and threatening to hamper the benefits of the stamp duty scheme.”

Sommerville continues: “It is time the government acted decisively by tackling recurring delays in the property market through proper investment and an acceleration of its digitisation programme. While this won’t be resolved by March 31 2021, an industry-wide change in mindset is required now – not to mention a new approach to leveraging the available technology to harness the data at our fingertips.

“We saw evidence of an increase in firms adopting digital practices as a result of the pandemic. What’s needed now is commitment by all parties to collaborate, adopt the right technologies and build a more efficient property market. Only then will we be able to identify risks upfront, reduce uncertainty and progress transactions more effectively in the long term.”

His comments come after Search Acumen produced a market snapshot of the conveyancing sector, saying it has “regained its footing” in the third quarter of the year as demand returned to the property market.

The snapshot report says: “The [Search Acumen tracker] shows conveyancing volumes rose sharply by 105 per cent over the last quarter, climbing to 169,143 registered transactions in Q3 2020, up from 82,385 in Q2 2020. July was the busiest month, with 61,587 transactions completed.

“The surge can be largely attributed to the re-opening of the housing market following the spring lockdown, with the government’s stamp duty announcement likely to drive higher transaction volumes during the remainder of the year as consumers looked to take advantage of tax savings.”

Countrywide, which is thought to have closed over a fifth of its branches in recent years, has opened a new office in London.

It’s been widely publicised throughout the industry – but without detailed comment from the company itself – that some 50-plus Countrywide branches have closed this year alone. It’s also been reported that some 180 branch closures have taken place across the Countrywide network since 2016.

However the new office – a rare piece of positive news from the company – is in Cadogan Street, Chelsea, and is operating under the John D Wood & Co banner, one of two upmarket brands run by Countrywide.

Polly Ogden Duffy, managing director at John D Wood & Co. says, “Chelsea lies at the heart of our business, and our new Cadogan Street office is an important link in expanding our network into Knightsbridge … We remain proud to say that no other agent has more offices in the Royal Borough of Kensington and Chelsea.”

The company says the new office complements three other branches in Chelsea and Knightsbridge, and states: “Chelsea has long been an area where people aspire to live. The eclectic range of property styles mean there really is something for all tastes. From the grand crescents and garden squares, to the merchant houses of old Chelsea; artist studios to purpose-built blocks of all eras, and arguably the most well-known genre of all, the pastel coloured houses and cottages which run off King’s Road.”

Countrywide was asked for comment about the closure programme, and gave this response: “As we have said before where demand dictates we will open new branches and today we are delighted to be opening John D Wood & Co on Cadogan Street Chelsea (following strict Covid-secure guidelines).”

Countrywide remains the focus of a possible takeover by Connells; the deadline for confirmation of the proposed bid is 5pm on December 7.

Transactions appear to be edging higher than in 2019 for the first time this year – despite lockdowns and concerns caused by Coronavirus.

Comparison site GetAgent says transaction volumes across the whole of the UK were just 0.7 per cent lower in September 2020 than at the same month last year; in England alone, there have actually been 1.0 per cent more transactions in September over the 2019 level.

With the market having ground to a halt during the first UK-wide lockdown, property transactions in June of this year sat some 29 per cent lower than in 2019 at 83,860.

Even with the announcement of the stamp duty holiday in July, the lag of actually completing a sale meant that transactions sat 21 per cent lower than they did in 2019 and were also down 22 per cent in August.

However, the latest data for September shows a 16 per cent monthly uplift in transactions.

“The latest market data provides the best proof yet that the market has rebounded from the depths of pandemic paralysis, fuelled by a huge increase in homebuyer demand as a result of the stamp duty holiday. It’s the first time we’ve seen transaction levels exceed that of a year ago on a monthly basis since the market reopened for business and it looks to be the tip of the iceberg” says GetAgent founder Colby Short.

“With such overwhelming demand, the industry has struggled to cope causing huge backlogs of sales waiting to complete. However, as we continue to work tirelessly to clear this backlog, transaction numbers should continue to climb even higher over the next few months.”