Chain pressures set to continue after the stamp duty holiday dust settles

Last Thursday saw the end of the stamp duty holiday, the emergency government scheme which helped to sustain the market at record high levels of activity during the pandemic.

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Property Reporter
4th October 2021
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However, according to HBB Solutions, agents need to plan for a future in which the market is less buoyant and in which the same chain pressures that were there before the stamp duty holiday will still be there.

While the end of the holiday has been baked in for some time and has been tapering off since the start of July, many experts are predicting a slight market dip as everyone adjusts to life without the tax saving.

The general consensus is that prices won’t be anywhere close to collapsing after the holiday ends due to the ongoing and endemic imbalance of supply and demand in most areas. The consensus is also that the rate of price growth will slow from unsustainable highs.

But the issues that were in the market before the stamp duty holiday, and were if anything heightened by the holiday, won’t go away just because it ends.

Chris Hodgkinson, managing director of HBB Solutions, says: “We know that the time to get the whole sale completed, not just find a buyer, has increased again. According to findings from, the time to sell a residential property across England increased by just over two weeks during the first half of this year and in the run-up to the initial stamp duty deadline."

The research revealed that between January and June of this year, the average property was taking 320 days to sell, a 16-day increase compared to the 304 days taken during the latter half of 2020.

Hodgkinson adds: “Bear in mind that is the average time it takes, and in many cases, it could be taking longer. An average of nearly a year to complete a sale is on its own quite astonishing and concerning.”

So, while the market will not collapse in on itself after the stamp duty holiday – as some had initially feared – and there will be no cliff-edge scenario, the pressures on getting property chains completed will still very much be there and could see more buyers and sellers withdrawing, HBB claims.

Hodgkinson argues: “What agents need to do is find a plan B or C alternative to take away the delay and the uncertainty that comes with an ‘on market’ sale by providing a guaranteed sale in whatever timescales are required by the seller.

“A great offer to have as a plan B or C when a chain is under stress, and an alternative is needed at short notice, is via chain repair or a part exchange.”

What are the options?

Hodgkinson suggests that agents should consider partnering with a chain repair specialist to help keep transactions on the straight and narrow when the holiday ends – and speed up stalling transactions if necessary.

He says: “Chain repair can be vital in saving time, money and effort for all parties involved in a transaction. If, as expected, there is a slight dip in the market as it adapts to a return to pre-Covid levels of stamp duty, this could lead to a spike in transactions collapsing.

“While the market is still expected to be strong for the remainder of the year – as has been predicted by everyone from Savills to Zoopla – the market boom can’t last forever, and agents need to be prepared for more fallow periods or periods where the potential for chain collapses are greater.”

He says having that safety net in place, a means by which to prevent sales from falling through, is vital for agents as we leave behind the era of the stamp duty holiday and its huge impact on the property market.

Hodgkinson continues: “Another potential option for agents to diversify their revenue streams in a flexible, adaptable way is to consider part exchange.

“It’s an area that agents perhaps don’t have much awareness or knowledge of at present, but it could prove to be a great business enhancer, especially as the number of new homes and retirement communities being built continues to rise.”

He describes part exchange as something that is specifically designed to eliminate risk and increase a developer’s value by again providing that all-important safety net.

He says: “If agents can include part exchange in their pitch to the developers of new homes and retirement complexes, that’s another possible revenue stream, a plan C.

“The new-build market is booming at the moment, and of course isn’t affected by the end of the stamp duty holiday by and large, because the majority of first-time buyers still won’t pay any stamp duty when purchasing their home.”

“Additionally, the retirement living market is experiencing a rapid increase, too, especially as elderly people seek a better quality of living in light of Covid.”

Planning ahead

Hodgkinson says the market has been booming pretty much since it reopened in May 2020, and even before that there was the much talked about Boris bounce after the general election of December 2019.

He adds: “However, you don’t need to go back very far to a time when the market wasn’t flourishing as much as it is now, and when buyers and sellers alike were getting jittery feet as the Brexit stalemate and election uncertainty put a handbrake on everything.

“With the current issues surrounding supply shortages and the fuel crisis, and the ongoing challenges surrounding Covid and Brexit, there is no knowing for sure how the market will cope as we enter a potentially tough winter without the stamp duty holiday.”

Hodgkinson concludes: “Even if there is no major dip, as seems highly likely given the current fundamentals of the market, it still makes sense on many levels for agents to have a plan B, C or even D to help generate new business and revenue, as well as making themselves more resistant to potential future bumps in the road.”

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