Earlier in the year, Chancellor Rishi Sunak announced a stamp duty holiday on the first £500,000 of a property's value, saving movers up to £15,000. This resulted in a resurgence in the property market, pushing up house prices and stimulating demand. However, with the deadline for the scheme on 31 March 2021, there is now a race for buyers to complete their purchase in time.
At our recent event 'Property in a Pandemic: is now the time to move?', Purplebricks' Director of Lettings, Mortgages and Conveyancing Verona Frankish suggested people need to have the moving process underway by the end of October to ensure they beat the March deadline.
Moving house can often seem frustratingly slow, but with the stamp duty holiday deadline looming, being able to speed up the process is increasingly important. Here we suggest five ways to help you move fast to ensure you don't miss out.
1) Get a buyer for your property fast
The first step in the house-sale journey is getting your property on the market. As time is of the essence, the best option may be to instruct an experienced estate agent, with good local knowledge and a strong track record of not only getting offers for their clients, but also helping to get the sale over the line by liaising between the various links in the buying and selling chain.
While it can be difficult to know which agent to choose, Money to the Masses has teamed up with GetAgent to create a really useful online tool to help you identify the best agent in your local area. Crucially, the tool highlights the average time each agent has properties on the market for before they go under offer. By choosing the one with the shortest period, you can give yourself a good chance of getting a buyer faster.
Although many vendors have been tempted to bump up their asking price in the knowledge that potential buyers will have up to £15k more in the kitty because of the stamp duty deal, with time running out it pays to be realistic with what price you are likely to achieve on your home. It could backfire to put the price too high, have the property languishing on the market for weeks or months and then miss the stamp-duty deadline.
2) Choose your buyer wisely
In order to move quickly, you need to aim to have as short a chain as possible. This is beneficial for two reasons: it means there is less chance of other links dragging their heels and slowing down the process, and, in the worst case scenario, minimises the risk of the chain falling apart if someone pulls out.
At this stage, it is more efficient to insist your estate agent only arranges viewings for potential buyers who are 'proceedable', which is to say they are either cash buyers, first-time buyers or have an offer on their property. This weeds out time wasters who are not committed to the process or may take time to secure a buyer for their own property.
When you have an offer in place it is then worth considering if the person:
- has their finances in place
- is part of a long chain
- is working to the same timeframe you are. If, for example, you have a potential cash buyer or first-time buyer but they are tied in to their rental agreement for a further six months, you will miss the March deadline
If you have two competing offers, it may be worthwhile to accept a slightly lower offer from the buyer in a better position. Keep in mind though that you don't want to end up sacrificing too much that it wipes out the stamp-duty holiday bonus.
3) How quickly can I get a mortgage?
Although it is not essential, it can be a good idea to get a decision in principle (also known as an 'agreement in principle' or 'mortgage in principle') from a lender early on in the moving process, even prior to viewing properties you are interested in buying. It is an indicator to estate agents and vendors that you are serious about the move and, importantly, have the finances in place to be able to proceed quickly.
In addition, having a decision in principle can help speed up the process after you have had your offer accepted on a property as - although it doesn't serve as a guarantee - it shows you are likely to have your final mortgage agreed with that lender.
It is worth noting that requesting a decision in principle will result in a "hard search" on your credit file. If you are turned down and then reapply a number of times with different lenders, this can have a detrimental effect on your credit rating. It is also time-consuming to trawl through deals, complete the details for the decision in principle to then be turned down and have to repeat the process again.
It is, therefore, worth considering using a good, whole-of-market mortgage broker. Through experience, they will be able to tell which lenders are likely to accept your application based on knowledge of the different lending criteria and your personal circumstances. This saves time and also protects your credit rating.
Another reason for using a broker in today's market is the fact that the number of mortgage products available has shrunk dramatically, particularly for high loan-to-value mortgages. Lenders are also increasingly changing the rates and the terms and conditions associated with their mortgages. An astute broker will be able to keep up to date with these changes and guide you through the market more quickly and smoothly than if you face it on your own.
In terms of choosing which one to use, we rate online mortgage broker Habito, which we believe offers an unbeatable level of service. For more information, check out our review 'Habito review: The best online mortgage broker for you'.
4) How to get a mortgage accepted quickly
Once you have had an offer accepted on a property, you can then look to move from a decision in principle on your mortgage to starting a full application. If you are using a broker, they will advise you on the information you need to provide, along with any supporting documentation. Again, to speed up the process it is good practice to complete and sign any forms, as well as locate and send over any supporting documents as quickly as possible.
Which documents will I need for my mortgage application?
- Proof of identity - passport or driving licence
- Utility bill
- Last three months' payslips
- Bank statements for the past three to six months
Your lender may require additional documents, particularly if you are self-employed or have earnings from more than one source. You are likely to be required to have any copies of documents certified by either:
- a bank or building society official
- minister of religion
- chartered accountant
- solicitor or notary
- teacher or lecturer
If you don't know anyone suitable, the Post Office now offers a Document Certification Service, which can be an efficient way of getting it done if you are pushed for time, although it does incur a fee, starting at £12.75 for 1-3 documents.
Which lender will process my application the quickest?
Unfortunately, the turnaround time on mortgage applications has gone up significantly since the Covid pandemic hit, with the average time going from 10 days in 2019 to around 20 days now, according to data from online mortgage broker Trussle. This timeframe could be even longer for more complex cases, such as for those with poor credit or specialist lending requirements.
The fastest lenders in the UK, according to the broker, include Barclays (10 days), Halifax (14.5 days) and BM Solutions (17 days). However, applicants experiences can vary greatly from the average, with some being accepted for a mortgage in a relatively short space of time while others get caught in a logjam if the lender they have selected has received a sudden influx of applications. As with almost everything during the Covid pandemic, mortgage-application times are hard to predict.
Again, a good mortgage broker will be able to help you identify which lenders are working more efficiently at the time you are making your application. Further, Purplebricks' Verona Frankish suggests that, as tempting as it might be, it is not a good idea to chase the lender as this could, counterproductively, slow down the process as the lender spends time fielding calls from applicants rather than processing the applications. Instead, track progress through your mortgage adviser.
5) How to speed up conveyancing
Anecdotally, the part that always seems to take the longest for home buyers is the conveyancing, which involves carrying out all the legal processes to get you to the point of completion. For more information on what conveyancing involves, read our article 'Conveyancing - guide to the legal process of buying a house' .
Choosing the right conveyancer can greatly reduce the amount of time it takes to complete on the sale and purchase. Some points to consider are:
- choosing a conveyancer that can work with your mortgage lender. Often lenders will only collaborate with conveyancers on their panel, meaning if you choose one that is not on this approved list it can add weeks to the process.
- assessing how proactive the solicitor is likely to be before you instruct them, considering how they respond during the initial consultation process. It may also be helpful to read reviews of the firm before making a decision
- aiming to opt for a solicitor who is part of the Conveyancing Quality Scheme or who has perhaps won awards for their work
Once you have instructed your conveyancer, follow the following steps to try to maximise efficiency:
- give the details of the conveyancing solicitor to your estate agent and ask them to send the 'Sales Memorandum' over immediately
- raise any concerns you have about the property with your solicitor so they can begin to look into them straight away
- organise the mortgage valuation and any survey you would like to have on the property
- let the solicitor know if a family member is contributing financially to allow you to buy the property so they can draw up a 'Gifted Deposit' document
- if a survey reveals problems with the property you are buying that you are willing to live with - and that the lender is still happy to lend on - consider taking out an indemnity policy, which means that if the issue becomes more problematic later down the line, you are insured
- save time by digging out any documentation you might have for building work, extensions or home improvements you may have done during your time at the property
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