Conveyancing process delaying property sales:

Sellers could struggle to sell before Christmas.

Christmas seems to come earlier and earlier every year. Last year online retailer Very dropped its Christmas ad in October much to many of our chagrin. You, like me, probably feel its way to early to be thinking about Christmas, especially considering that the Summer Solstice was only yesterday.

However, prospective property sellers might be surprised to learn that if they don’t get their property to market within the next few weeks, they may struggle to reach their all-important completion date before the festive period, according to Rightmove.

Why is it taking so long to sell property?

According to Rightmove’s latest House Price Index the delays are caused by a conveyancing log-jam. The time to get through conveyancing has risen to an average of 150 days. Currently, there are 44% more properties sold subject to contract than there were at the same time in 2019, which is a whopping 500,000+ homes waiting for their sales to go through.

Although it does seem that the conveyance issues are the driving factor in slowing down the selling process, Rightmove’s House Price index also shows that even as the pace of property price growth is slowing, now at 0.3%, the average price of a property coming to market is still breaking records with the price now standing at £368,614.

The rise in property prices are starting to show a decline in buyer demand, May is down by 8% compared to April but remains more than double the pre-pandemic five year may average. This marginal decline in buyer demand is unlikely to significantly affect the timeline of selling a property but could be an indicator that the market is due to turn from a seller’s market to a buyer’s one. One more reason for Seller’s to act quickly as the market settles into its new post-pandemic state.

What is Conveyancing?

The conveyancing process is essentially the ‘legal bit’ of a property transaction. It covers all the legal aspects of buying and selling property, including but not limited to; contracts; surveys; and transfer of ownership. It is an essential part of the property transaction and as such helps to be handled by a licensed conveyancer or conveyancing solicitor, who has an in depth knowledge of the process.

What’s the difference between Licensed Conveyancer and Conveyancing Solicitor?

Licensed Conveyancers are specialists in Conveyancing, whereas a Conveyancing Solicitor is qualified in other aspects of property law. A Conveyancing Solicitor’s broader knowledge of property law can help if the sale involve further complications due to remortgaging; lease extensions or the transfer of equity.

Why is Conveyancing taking so long?

In tmgroup’s report “The New Normal” they polled 800 property professionals, including Residential Conveyancers, Commercial Real Estate Professionals, Estate Agents, Lenders, Surveyors, Developers, and more.

The poll found that among property professionals they believe that the conveyancing process is the biggest factor in causing delays. The report also suggests that its the increased volume of transactions that is causing the delays, especially during the conveyancing process, the industry as a whole is working at capacity and can only move as fast as its slowest party, the conveyancer.

^{The conveyancing process’ lack of digitisation has led to a build up in cases during the pandemic that is slowing down the whole sales process. – Adobe Stock}

Nick Ball, Head of Sales and Client Services at Mio says its “important to make some distinctions here ; for the most part, that it is processes – and not people – that are responsible for the delays.” He points to the antiquated process as the issue and the report does call out for further reforms, particularly in the digitisation of the process.

“The sad reality is that conveyancers just weren’t ready for the ‘overnight’ switch to digitisation and homeworking that was brought on by the pandemic,” says Matt Joy, Sales and Marketing Director of the tmgroup. His colleague, Martin Manning, Head of Account Management also of the tmgroup follows to say, “It’s sadly taken a global pandemic to make other firms realise just how outdated and convoluted their processes are.” he also explains that, “Conveyancers have largely spent the past 18 months in survival mode; with little time to plan ahead and implement the available technology that ironically would have helped them better manage their volumes.“

What is the Solution?

There is no simple solution to the conveyancing problem and some would definitely argue that the process isn’t broken so it doesn’t need fixing but the process in its current state is undeniably slow and the industry is calling out for it improve.

Rob Hailstone, the founder of Bold Legal Group, believes, “the industry is making good strides already – thanks to the focus on material information from National Trading Standards.” The National Trading Standards’ project to define what constitutes material information for property listings is only in the first of it’s proposed three stages. For an industry that is running at maximum capacity the government just isn’t working fast enough.

Estate Agents are working harder than ever and are having minimal returns for their efforts. They are struggling to convert their pipelines quickly due to the delays in the transaction process which is causing significant cash flow problems for many. The pandemic has seen 891 estate and lettings agency branches close as of February 2021 but estate agents are still facing problems, just different ones.

Property Auctions as the solution?

The benefits of a property auction are in its strict timescales. A Traditional Auction exchanges the moment the hammer drops and sees its completion day in just 28 days after. The Modern Method of Auction takes a little longer, with the exchange taking place 28 days after the hammer fall and the completion a further 28 days from that point.

^{The property auction process is already transparent and has built in timescales that eliminate the delays plaguing the property market.}

For estate agents the faster timescales means that they can bank their fees much faster than in a private treaty sale. In the current market, auction properties could be the difference for estate agencies, helping ease the potential long droughts between sales caused by the conveyancing delays.

For sellers the faster, fixed timescales combined with the 0% commission of auctions have always been the leading draw. When sellers decide to use the auction route they can depend on the contractual timescales; the security provided of setting a reserve price; the competition that is generated; and the benefit of the buyer paying the fees.

Why are auctions so fast?

Auctions benefit from the production of an auction pack. The auction pack is a legal pack that contains everything a buyer needs to legally make an offer on the property. The production of this pack covers much of what would come up during the conveyancing stage of a private treaty but is supplied to the buyers before they make an offer. In this way, the whole transaction is completely transparent. When buyers make their bid or offer it’s not made subject to contract but under the auction terms and is legally binding.

To start the process of selling your property via auction, get a Free Instant Market Appraisal.

Are you an Agent looking to partner with an auctioneer to convert your pipeline faster?

Call 0800 038 5996 or Email info@whoobid.co.uk

Explained: The Methods of Auction

Auctioning as a method of sale dates back to over 2500 years ago, when the Greek Historian Herodotus was the first to mention the auction procedure. Since then it has been used throughout history as a means to buy and sell goods. The Roman Empire would use the method to sell the spoils from their wars and in 17th Century England, leaseholds would be sold at auction by candle. The candle would be lit and the auction would end when the candle went out. The use of the candle was to prevent bidders from only bidding in the last minute as no one could really know exactly when the candle would go out.

Auctions have moved on since then. The digital age has seen auctions increase in popularity by taking them online with sites like eBay, selling everything from Cars to Pokémon Cards.

The property market has also moved into the online realm and so have the property auctioneers. Whoobid are one such auctioneer. For us, the faster timescales and securer sales rate supplied by the terms of an auction sale, are an advantage to buying and selling property that just can’t be ignored. And the convenience of it all being online and accessible to everyone is what we strive for as a company.

That’s why we provide two methods of auction to our sellers:

The Traditional Method

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If you have any knowledge regarding how an auction works the Traditional Method is most likely what you’re imagining. The method is as old as auctioning itself. How it works online and through our website isn’t too different from how an auction would be held “in-the-room.”

When a property is to go to auction under the traditional method it will first go through a marketing period. We will market the property on our website and on a number of property selling portals, such as Rightmove. We will also feature the property within our catalogue and emails that we regularly send out to our extensive database of buyers looking for properties. The property will also be marketed through the seller’s estate agent in their usual methods. This two pronged approach should give the property maximum expose to any and all potential buyers.

The property is advertised with a Guide Price. A guide price is NOT what the auctioneer expects the property to sell for. The guide price acts as an indication as to what the sellers minimum expectations are for the property to sell. The guide price will be within 10% of the seller’s Reserve Price. The reserve price is the minimum price that the property can sell for at a live auction event.

For example, if a sellers property goes to market and they set a reserve of £100,000 it can be advertised with a guide price as low as £90,000. A lower guide price is used to increase the interest in a property as buyers are always on the lookout for a bargain.

During the marketing period the property being auctioned will have an auction pack produced. The pack may take a week or so depending on the property. The pack includes all the necessary documents required for a buyer to legally purchase a property through auction and will detail all the fees involved with the sale. It is strongly advised that any buyer take the time to consider the auction pack in detail and seek legal advice. We also strongly recommend viewing the property and conducting you own investigations before placing a bid.

To bid on an auction a buyer must first register an account on our site. This can easily be done here: Register an Account. Once the account is set up, the prospective buyer is happy with the auction pack and they are ready to place a bid on a property, all that’s left to do is wait for the auction date.

We run auctions tailored to the property and seller’s needs, so unlike some other auction houses, each property will have its own auction date. The date may change during the marketing period depending on the seller’s needs or if there are delays in producing the auction pack. The auction may also close early if a buyer’s pre-auction offer is accepted by the seller, for this reason we suggest you register your interest in the property with us so that we can notify you of any changes and allow you a chance to counter-offer if an offer is made.

When the auction goes live there will be a 3 hour window in which buyers can bid on the property. Like in the 17th century when a candle was used to prevent bidders sniping the sale at the last minute we have our own tool in place. Any bid made with the final minute of the auction countdown will automatically increase the timer by three minutes allowing any other buyers to respond with a counter bid. This will continuously extend the timer for every subsequent bid made in the final minute until the timer is left to fully run down to 00:00.

The bids that are placed during an auction are legally binding if they are the winning bid by the end of the auction and have exceeded the seller’s reserve price. It is advised that you consider the fees payable when determining your maximum bid as any fees due will be charged in addition to the sale price.

In the Traditional Auction once a buyer has become the winning bidder, the auction fees are automatically taken from their chosen account and the contracts are immediately exchanged. The buyer and seller will then have 28 days to fully complete the sale.

The Modern Method

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The Modern Method of Auction is different from the traditional method in a few crucial ways. The traditional method is an incredibly fast process, which gears it more toward investors and cash buyers. The modern method has slightly longer timescales than the traditional method but can still be leagues ahead of the private treaty method of sale. Our last post detailing the timescales of the private treaty method of sale shows that the process can sometimes extend to over a year if you get really unlucky.

This makes the modern method of auction ideal for a lot of buyers, as it pairs the faster timescales of auction with the ability to purchase the property with a mortgage. It’s also advantageous for sellers who are most often drawn to auction for the speed and security of a sale under auction terms but can get turned off by limiting their market to only investors and cash buyers.

The traditional method is perfect for selling quick and getting paid quicker but you limit your buyer pool to those who are more savvy with their property purchases. Many of these buyers will be looking for ways in which they can make money off their purchases. For this reason, to achieve the most success at a traditional auction, these properties will need to be what people often consider as “auction” properties; properties that need improvements; land that needs development; or properties that have good rental prospects.

The modern method still benefits from quicker sale times, when compared to private treaty, but it benefits from still being open to everyone. Where investors will always have an eye on their profit margins, at a modern method of auction you’ll find buyers looking for their forever home. These buyers are the buyers that are going to drive the price up above and beyond what an investor will pay, getting the best price for the property.

For this reason the modern method breaks all of the notions that people have about what is an auction property. Using the modern method you can sell and buy any kind of property in any condition, with properties that are ready to move in doing just as well if not better than if they were sold through private treaty. Selling and buying under auction terms filters out the kind of buyers and sellers that withdraw from deals that see as many as 3 in 10 private treaty sales fall through. Like with the traditional method, it eliminates any gazumping, gazundering or gazanging. Any bid that is made during the auction or any offer made pre/post-auction is a legally binding offer, that once accepted, ties both the seller and buyer to the exchange of the property.

How a modern method auction works is much the same as the traditional method. The property will undergo the same marketing strategy, being advertised with a Guide Price that is an indicator of the seller’s Reserve Price; an auction pack will be produced containing all the documents that are needed for a buyer to legally purchase the property; the property will be given an auction date; buyers will need to Register an Account with Whoobid; and once the auction is live it will be open for a minimum of 3 hours and then extended as necessary by the anti-sniping tool.

Where the modern method differs is that when the auction ends and the winning bidder has successfully bid over the seller’s reserve price (or a pre/post-auction offer is accepted) the property does not instantly exchange. In the modern method of auction a successful buyer essentially wins exclusivity rights to buy the property at the winning price. The buyer then has 28 days to reach the point of exchanging contracts. This approach allows more time for buyers to arrange the appropriate finances, which is more difficult to achieve with the traditional method of auction.

Once again, bids made during the modern method of auction are legally binding and made in addition to the auction fees so buyers should consider this when making any bid or pre/post-auction offer. Once a bid or offer has successfully won the property the auction fees are due immediately. This ensures the security of the sale for both buyer and seller. Seller’s know that a buyer won’t likely pull out of the sale because they’ve made a financial commitment to the purchase and buyers who have made that financial commitment have purchased the exclusivity which ties the seller to that purchase for the 28 day period.

Once the sale has reached the point of exchanging contracts there is then a further 28 day period in which both the buyer and seller can reach completion.

Summary

Traditional Auction

• Fastest Timescales
• Security of Sale
• High completion rate
• Large Investor Base

Modern Method

• Open to Mortgage Buyers
• Faster Timescales
• Security of Sale
• High Completion Rate

How long does it take to buy a property in the UK?

Buying a property through Private Treaty is one of the most stressful things that one will go through in their life. It is a long and arduous process that can drag on for months and months. Below we take you through the step-by-step process of how to buy a property through Private Treaty.

Step One – Mortgage in Principle – Around 2 Weeks

Before you even begin to look at properties you want to buy you need to know what your price bracket is. Unless you’re able to buy a property outright in cash then it’s very likely that you’ll be a purchasing a property through a mortgage. A mortgage is a type of loan you get from a bank or building society to help buy a property.

Don’t you need to know what property your buying in order to get a mortgage? Yes. So why is this the first step? If this seems a little bit like the chicken and the egg scenario you’re not entirely wrong. You can’t get a mortgage without property, but you can get a mortgage in principle.

A mortgage in principle is not essential when buying a property but it helps and its always better to be organised. A mortgage in principle is confirmation of how much a bank or building society is prepared to lend to you based on the information you’ve provided. It gives you an idea of what you can expect from your mortgage lender which helps you narrow down your search in finding the right property for you.

The allocated two weeks here is not necessarily how long it takes to get the agreement in principal from a lender, that will be closer to one day, this is representative of the time spent shopping around mortgage lenders.

The benefits of having a mortgage in principle is that it speeds up the process later when finalising your mortgage. As we’ll get into later, speed and efficiency is paramount in purchasing a property as many of the pitfalls that can lead to sales falling through are exacerbated by extended timescales.

For that same reason, it is also a good idea to line up your conveyancing solicitor at this stage. A conveyancing solicitor is a legal expert that you’ll hire to guide you through the purchase of the property and become essential once you make an offer on a property.

Step Two – Finding Your Property – Up to 40 Weeks

This step will usually be the longest step when it comes to purchasing a property.

Whilst there are many outside factors that will affect the length of this step, this is the step that you have the most control over how long it will take. This is the step where you search for the property you want to buy.

Having a mortgage in principle will help narrow down the field to what you can afford, it will then be up to you to research what area you want to move to and any other criteria you may have concerning the property you wish to buy. You’ll want to go to multiple viewings before deciding on a property and making an offer. The property market itself will have an impact on this step. Currently, we are in a sellers’ market. This means that there are more buyers out there looking for property than there are properties to find because of this, properties are selling quickly and for the most part over their asking prices.

The good news here is that when you’re offer is accepted the process is likely to skew to the faster end of the timescales.

The downside is that with so few properties and them quickly disappearing, if a property that meets your criteria is sold to another buyer, you could be waiting longer for similar property to come to market.

Step Three – Having an Offer Accepted – Up to 2 Weeks

Once you’ve found the property that you wish to purchase now is the time to make an offer. At this stage your solicitor’s expert advice will be invaluable. They will be working to get you the best price for the property, and they will be more knowledgeable when it comes to the factors at play when making your offer. Things like how many other buyers are interested and how long a property has been on the market will all affect how much you should offer above or below the property’s asking price.

Once you’ve made an offer, you’ll likely enter into negotiations with the seller. You’ll want to keep the price low, whilst the seller will be trying to push the price up. When purchasing with a mortgage, having secured a mortgage in principle will help the seller feel more secure about the sale. As many as one in six sales fall through due to mortgage issues alone.

It’s also in your best interest, particularly at this stage, to keep things moving as quickly as possible. From here on until the exchange of contracts you run the risk of being Gazumped.

Gazumping is where another buyer enters the picture offering more money than you. This causes the seller to back out of your offer and accept theirs instead. You can make it a condition of your offer to take the property off the market, but this is not a full proof way of avoiding gazumping.

Step Four – Finalise Mortgage – Up to 8 Weeks

Macro close up of a Minature house resting on new pound coins with a white background

Once your offer has been accepted, you’ll now want to finalise your mortgage. Having already gotten a mortgage in principle will greatly speed up the process at this stage. The mortgage lender will now need all your details and they will need to conduct a full valuation of the property you wish to buy. From this they will determine the viability of their investment and the likelihood that you’ll be able to afford the payments going forward.

Having your mortgage in principle isn’t a guarantee that the lender will provide you with the money needed to purchase the home. The details will need to be finalised for the mortgage to be confirmed. If the lender refuses your application for a mortgage the property sale will likely fall through.

Last year Aldermore reported that four in five prospective first-time buyers had been rejected for a mortgage. It isn’t just from buyers not qualifying for the mortgage that can result in the sale falling through, some lenders may still “down-value” a property from the price agreed between the seller and buyer.

This is means that the lender disagrees with the value of the property that the seller and buyer have agreed upon and as such, they don’t feel safe in the investment of their money through the mortgage. This is becoming a more common occurrence in recent times as lenders anticipate the market to slow down or potentially crash they are down valuing homes by tens of thousands of pounds.

Sellers can be wary if this process goes on for too long. They know that if a mortgage buyer is struggling to get their mortgage, their sale is likely to fall through. In this instance, in the seller’s best interest to find a different buyer than to wait for their current buyer to find another mortgage lender willing to accept them.

Step 5 – Conveyancing and Surveys – Up to 12 Weeks

A this point in the process your Conveyancing Solicitor, the seller, their Solicitor and Land Registry will all begin the legal process of the property sale. This will involve verifying the sellers legal right to sell; verifying the properties boundaries; whether it has planning constraints or environmental risks. It will involve the completion of surveys; your Conveyancing Solicitor will want to ensure the property is in the condition that the seller claims it is in.

The Homeowners Allaince found in 2021 that 27% of house surveys fall through because of a bad survey. If your survey comes back with minor problems the sale probably isn’t going to fall apart. You could have the seller fix the issues or just renegotiate the price in order to accommodate the additional costs in repairs. If the survey finds something bigger, then it’s likely the sale will fall through. Anything like issues with the wiring, dry rot, subsidence or Japanese Knotweed can all be deal breakers.

This stage is why it is a good idea to have organised getting your solicitor earlier. Depending on how busy the property market is you mind find that solicitors are swamped with multiple cases. By booking in early and being organised you can ensure that you are high up on their priority lists.

Step 6 – Exchanging Contracts – Up to 4 Weeks

This is the all-important part of the house sale. Once yours and the seller’s solicitor exchange the signed copies of the completed contracts the sale becomes legally binding. At this stage your Solicitor will secure the deposit from you and receive the funds from your mortgage lender. If there are any outstanding complications with the purchase that need finalising this can be slow the process down. It’s important to keep chasing for updates from your solicitor to ensure that the process is moving as quickly as possible.

Once everything is finalised a completion date will be agreed upon.

At this stage, although you haven’t yet completed you are legally bound to buying the property so it is advised that you secure building insurance on the property in case anything happens between now and completion.

Before the contracts are exchanged is the last point in which a seller can cancel the sale. They may decide to stay in their property or they may just want to wait a few more months if the property market looks like the house prices are going to go up.

If your sale is part of a chain this is where the process can get held up as you become more reliant on other sales reaching the same point. A property chain is where buyers are all linked together because the purchase of their new home is reliant upon the sale of their old one.

One in five property transactions fall through because of a break in the chain. There’s not much you can do when in a chain other than ensure your link in it is as strong and as efficient as possible. Unfortunately, the longer the property chain and the longer the process extends for, the higher the chance is that a link in the chain will fail and the higher the chance that the failed link will knock on to de-rail your own purchase.

Many buyers will try Gazundering at this stage, this is where they lower their offer at the last second in the hope that the seller is too far along in the sale process to want to see the deal fall apart. It is a risky strategy that can often see property chains fall apart where sellers remain steadfast on the previously agreed property price.

Step Seven – Completion – Up to 2 Weeks

Hand of realtor hold house key aganist office background. Family new apartment credit concept.

This is the final step in purchasing the property. You’ve reached the end of the long and arduous process. At this stage you will receive the keys and title deeds to your new home. The only thing left to do is pay the final Stamp Duty Tax and register your property purchase with the Land Registry Office.

Buying at Auction

An alternative to the purchasing through private treaty that is often overlooked is purchasing a property at auction. Many house buyers immediately rule out auctions as they see it as a playground for property investors and cash buyers but the auction environment is quite different now but the auction environment is very different now.

The perceptions that auction properties are all run-down fixer-uppers is misplaced. Although, they do perform well at auction what makes an ideal auction property is less about the property and more about the seller. There are now all kinds of properties available to purchase at auction, and the common denominator is a motivated seller. Today, many people can find their wealth is tied up in property and the private treaty method cannot realise those assets fast enough for them.

Buying at auction reduces the stress of worrying whether your property chain is going to fall through, and it eliminates the possibility of gazumping and gazundering. In the live bidding process, all bids are final, and the property will sell to the highest bidder if the seller’s reserve has been met.

You will also receive an auction pack before the property auction which will include all the legal documents required to purchase the property.

Utilising the Modern Method of auction also opens the doors to mortgage buyers. Modern Method Auctions operate slightly differently to Traditional ones whereby the winning bidder wins the exclusivity to purchase the property at their winning bid price for 28 days. This allows the buyer time to finalise their mortgage with their lender.

Auctions are no longer for the wealthy cash buyers and investors, taking place in stuffy halls. The process is open online to everyone and offers a more streamlined way to purchase and sell property in the modern age.

See what properties we have on offer at Whoobid.co.uk.

Celebrating 70 Years of Queen Elizabeth II on the Throne. How has the Country Changed?

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70 years ago, on February 6, 1952, King George VI was found dead in his bed by a servant. He had been in poor health following surgery months earlier when his left lung was removed due to a malignant tumour. His daughter, Elizabeth, was in Africa fulfilling her duties on a Royal Tour when she learned the news. A few days later, it became official, she ascended the British Throne and became the Queen of England.

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Much has changed in the 70 years of her reign and as we celebrate the Queen’s Platinum Jubilee, we’ll take a look at just how much the country has changed.

Housing

We’ve seen some record highs in the housing market in recent times, so much so that in the decade since the Diamond Jubilee the average house price has risen by 68%. Today’s average house price of £277,000 is an astounding 146 times higher than in 1952 when Queen Elizabeth first took the throne. Back then, the average cost of a house would set you back by £1,891. By today’s standards that may seem extremely cheap but back then it was still about four times times the average yearly salary and only a third of families could afford to buy their own home.

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In the years following the Second World War, families in the U.K. were much more likely to be in rented accommodation. Only around four million people in the U.K. owned their own homes back in 1952, whereas nowadays more than 15 million do. That’s more than seven out of ten families in the U.K. who now own their property outright or have a mortgage on it.

That doesn’t mean that homes have gotten more affordable though, when compared with the average salary, purchasing a home will costs the average U.K citizen toady more than eight times their annual salary. As a comparison, Property Industry Eye recently reported that, a person today would need a 35% deposit to borrow 4.5 times there income and, using the national average, that deposit would equate to £74,402.

That £1891 back in 1952, if adjusted for inflation to today’s money comes in at around £56,000. Back then it would have bought you a house, now it wouldn’t even cover the deposit.

Lifestyle

We’ve seen some huge changes in the U.K. over Queen Elizabeth’s 70-year reign. In 2020, 3% of a household’s power was produced through coal, back in 1952, that was an astonishing 96%! These changes have come about due to our increased understanding in climate change and our nationwide movement toward more sustainable sources of power.

We may have become aware of the effects of global warming across the globe but we saw the opposite effect in our own homes. Today 98% of us own a fridge to keep our food cool and fresh. In 1952 only 8% of us of had that luxury.

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Only 14% of households had telephones and equally 14% owned televisions, but that number grew rapidly to 31% by 1954.

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Television wasn’t what we know it be now either, as well as being in black and white, there were also restrictions on when programs could be broadcast. A weekday broadcast could only air between 9am to 11pm and on weekends only 8 hours a day were allowed to be broadcast. It wasn’t until 1955, when ITV was introduced, that viewers in the U.K were able to watch anything other than the BBC. The TV license costs a U.K. household £159 a year currently, back in 1952, you’d pay £1 for a radio licence and £2 for the monochrome TV license.

Family

Family life has changed significantly, on average families are becoming smaller and the significance of being married before starting that family has also become less important. In the early fifties a U.K. family would have 3.5 children and only 4% of those would be born out of wedlock whereas today the average family only has 1.7 children with almost half of those being born out of wedlock.

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Marriage is still popular among U.K. couples today, but divorces have also seen a significant growth. In the fifties around 33,000 couples a year would go through the process of legally ending their marriages and now it’s up to nearly 120,000 a year.

Although, it’s clear that marriage is no longer seen as a necessity for couples, at least not as much as 70 years ago, its unclear what has been driving these trends. It’s possible that the change has been driven by the antiquated treatment of women that has undergone many reforms over the years, allowing them further independence and relying less on men to maintain higher living standards. Back in the 1950’s they were paid nearly half as much as men for no reason other than their gender.

Spending

As we all tighten our belts during the current cost-of-living crisis, and curse at the record high petrol prices, now at an average of 173.02p per litre, its hard not to feel nostalgic for the times gone by.

_{^{Woman pumping gasoline fuel in car at gas station. – alexanderuhrin – Adobe Stock}}

A gallon of petrol, in 1956, during the height of the Suez crisis, a time that saw the U.K. Government introduce petrol rationing in order to cope with shortages, cost the U.K. driver five shillings and four pence in today’s money that is about £4.65.

World War II officially ended in 1945 but rationing was still in place in the U.K. in 1952 when Queen Elizabeth ascended the throne. The weekly food bill per person in 1952 was 20 shillings and 8 pence, (around £18 in today’s money), In 2020 it was up to £63.90.

For comparison, in 1952, a pint of milk cost 4p and pint of beer would set you back 9p. Today you’d expect to pay 69p for the same milk and a whopping £4.08 for the pint of beer.

If you thought the price rises in beer was hurting your wallet, then you haven’t recently organised a wedding. I’m due to be married later in the year and let me assure you just adding the word wedding to an item can triple its cost. People in the U.K. spend on average £32,000 on a wedding currently, back in the 50’s a wedding cost an eyewatering £70.

Money

Money in the U.K has undergone a complete overhaul in the U.K over Queen Elizabeth’s 70-years-and-counting reign. In 1952, we were still using the old pre-decimal system of currency, that saw 12 pence to every shilling, and 20 shillings to every pound. That’s right! There used to be 240 pence to the pound.

It wasn’t until February 15 1971, known as ‘Decimal Day,’ that saw 3.4 billion new coins minted in Great Britain, that we changed to the 100 pennies to the pound system we’re so familiar with today. And if the old system didn’t confuse you already, wait until you start factoring in for inflation. £1 in 1952 when adjusted for inflation would reportedly be worth £24.34 today.

_{^{A British Shilling circa 1963 – Wikipedia}}

Even the way in which we spend money is different. Barclay’s introduced the first credit card in 1966. Now 69% of adults own one. The following year the first cash machine was launched in London. 1988 was the height of the banking boom, where Britain had more than 20,000 bank branches across the country, last year we saw that number drop to 8,810. This brings us full swing back to where we started in 1950 with around 10,000 branches across the U.K. Also, In 1952, 4.7 million of us were members of the various 796 building societies that were available. Today, there are 26 million of us signed up to just 43.

This downward trend in the number of physical bank and building society locations across the country is no doubt due to the advent of debit cards that now 98% of the population use and of course internet banking, which allows us to do most of our banking on the go or from our own homes.

Income

The way in which we spend money has definitely undergone a colossal change since 1952 but what’s also changed is the amount we earn and also how we earn it. As we’ve already seen the cost-of-living has increased to the point where our weekly food bill has tripled per person but we’ve also seen an increase in how much we earn.

The average male worker in 1952 who worked full time would earn £452 a year. Female workers, who were still facing discrimination in the workplace, were earning just over half that at £240 a year. Adjusted to today’s money, according to thisismoney.co.uk, that’s the equivalent of £9,696 and £5,149 respectively.

In 2022, the average annual salary sits at £31,772.

One of the biggest jumps in wage growth for an occupation is that of a professional footballer. In July of 1953, a professional footballer saw his wage jump from £14 a week to £15 a week. Meaning, at the time, a footballer would be paid on par with the nation’s teachers. By 2019, a first-team player for a premier league team would earn on average £61,024 a week. That’s nearly 4000 times more than what the same job paid 70 years ago.

^{_{Bottling Salad Cream, Crosse and Blackwell, Bermondsey, London, 1951 – Estate of Maurice Broomfield/Victoria and Albert Museum}}

Back in 1952, 40% of all full time employees, that’s around 8.7 million people worked in manufacturing, where as now the most common occupation is a care worker.

It shouldn’t be all that surprising either, people have much higher life expectancies now due to our generally healthier lifestyles and advances in medicines and medical practices. 70 years ago, 6% of the population, around 6.8 million, were pensioners and they were given £140.40 a year through the basic state pension; now it’s up to 14% of the population, around 12.1 million, and the state pension now pays them an average £141.85 a week.

Seller’s Market Remains Strong: Demand for 2/3 Bed Homes is High

The COVID-19 pandemic caused a spike in the housing market that saw many people living in urban areas moving away from the cities and seeking properties that offered more space. The increase in business’ changing to full or hybrid ‘work from home’ models saw buyers priorities change. There was a decrease in demand for properties nearer the workplace. This has seen the commuter zone expand as buyer’s are more willing to travel further, now that they are travelling less.

^{UK Neighborhood – Adobe Stock}

With all the doom and gloom surrounding the cost-of-living crisis, the housing market still remains relatively strong with activity levels still significantly higher that before the pandemic hit. The average asking prices for properties has increased by over £55,000 in the past couple of years. The pandemic has been a clear driving factor in these rises as the years before it hit the rises were only at £6,000. The growth is unprecedented for Rightmove who have been tracking prices now for more than twenty years.

Rightmove believes the prices are being driven from the lack of homes for sale. Buyers are still outnumbering sellers on the market with available properties on the market being down 55% when compared with 2019. The increased competition is seeing buyers enter bidding wars; paying over the asking price; and even appealing to seller’s good will. Buyers are now selling themselves to the sellers, who have been known to favour families over investors when selling their homes.

The increased demand is highest for two- and three-bedroom semi-detached homes according to Rightmove and we at Whoobid are seeing the same trend.

This 3 bed end terrace was guided at £250,000 and sold for: £270,000 in just 9 days. – Whoobid

This 3 Bed end terraced house in an attractive cul-de-sac location in Essex, needed modernisation but would make an ideal family home once renovated. It was being sold under the modern method of auction to open it up to mortgage buyers. A buyer was found for the property in just 9 days and was able to immediately exchange on the property and for £20,000 over the Guide Price.

This property in Blackpool is also a three bed traditional end terraced house in need of modernisation throughout. It only went live on Whoobid.co.uk before the weekend and is already seeing a huge amount of interest from prospective buyers.

A 3 Bed End Terraced property in Blackpool. Guide Price: £60,000 – Whoobid

Halifax may be predicting that the house price growth is going to slow further as the cost-of-living crisis stretches buyers affordability but the statistics from Rightmove suggest that the supply and demand will continue to remain out of kilter until, at least, the end of year. Whilst sellers continue to be outnumbered by buyers, those buyers are going to continue to compete for properties and as a result drive up the prices.

The most affected from the cost-of-living crisis are the solo first time-buyers, who are finding that, although, they could afford the potential mortgage payments, they are struggling to raise the funds for the initial deposit. For these buyers, while purchasing property has become increasingly difficult, it is by no means impossible. Many have begun turning to the bank of ‘Mum and Dad’ to help make-up their much-needed deposit and we are seeing many pensioners gift thousands in order to help their adult children battle with inflation.

The cost-of-living crisis continues to rage but house prices continue to rise as buyers compete for the small number of properties coming to market and subsequently drive-up the prices. It remains a sellers market and a good time to sell property.

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Aftermath of COVID leaves the property market’s future uncertain.

The Covid-19 pandemic may seem like it’s in the rear-view mirror but it’s impact on the world has created repercussions that are still lingering on, and we’re not just talking about the memes or Judd Apatow’s dreadful new Netflix comedy “The Bubble.”

^{Karen Gillan checks her phone while getting a COVID test in “The Bubble.”  
LAURA RADFORD/NETFLIX}

The pandemic has changed the working lives of many in the U.K. At the height of the pandemic in 2020 we began to see government mandated lockdowns. “Work from home where possible” became the mantra of the country. In January/February 5.7% of workers reported that they worked exclusively from home, by April that had risen to 43.1%.

Even now, as the Prime Minister begins to push the country back into the office we are seeing increased numbers of people who are working from home. As restrictions were lifted across the country, many workplaces adapted to hybrid models that could see workers commuting less, as they began working in the office for only three days and then remotely from home for the other two. This new work culture has seen towns, that were originally seen has commuter towns, enter into a revival period as their previously barren high streets are seeing an increased footfall.

As the nation’s workforce spend more time at home, they are beginning to re-evaluate their living situation and their criteria is relying less on the proximity to their workplace. Where workers are seeing reduced “in-office” days, a longer commute has become more palatable with buyers increasingly looking for properties with more open space.

Although it is predicted to change in the coming months, we are still in a market that is favouring sellers over buyers. There are just too many buyers looking for properties than there are properties coming to market. This has seen buyers turning to desperate new tactics like contacting sellers to prove their worthiness to buy the property, with sellers favouring buyers looking for a family home over investors or those looking for second homes.

However, it being a seller’s market doesn’t mean that selling a property doesn’t come without its complications. While sellers aren’t finding it difficult to find a buyer and get a sale agreed, what they are finding is an increased difficulty on getting to that all important completion date.

The cost-of-living crisis is eating away at everyone’s wallets and, on top of that, mortgage rates and house prices are rising. Buyers are under ever tightening constraints and purchasing property is becoming out of reach for many. Many banks and building societies are entering into crisis-limitation mode, during mortgage surveys they are marking down properties by around £20,000 to £30,000 in order to protect themselves. This is causing many purchasers to become unable to raise the finances needed to complete their sales which can potentially create a knock-on effect that sees whole property chains collapse.

Some sellers are looking for ways to proactively avoid the potential pitfall of a property chain and are selling their homes regardless to move, temporarily, into rented accommodation. This tactic reduces the pressure for the buyer to rush into their next property purchase but could also become more expensive, even if house prices drop in the next two years, as rental prices continue to increase during the cost-of-living crisis.

^{Online property auctioneers revolutionising the property market. Adobe Stock}

Property auctions are increasingly becoming a preferred method of both buying and selling as the auction terms provide a securer sale than that offered through private treaty. Currently, the market sees around four in every ten property sales fall through, whereas, with auction the number becomes closer to four in every one hundred. The securer sale provided by auction also comes with faster and stricter timescales in place that can see a property sell and complete within 28 days. In these increasingly uncertain times, particularly in the property market, the certainties provided by auction are an advantage to any potential buyer or seller.

Visit Whoobid.co.uk to see all our latest property listings or get started selling your property for 0% commission by getting a Free Valuation with no obligation.

A Critical Moment for First-Time Buyers

The property market is currently in a state of uncertainty. Property prices are still rising but the question on everyone’s lips is will the price rises just slow down or will we witness a drop or even a crash in the prices?

^{Photo by PhotoMIX Company on Pexels.com}

Last month we reported that a drop in house prices is potentially looming. It was a seller’s market with more buyers looking for property than there were properties to buy. The competition between buyers were driving up the prices but as the prices rose higher, more and more buyers were outpriced of the market.

With the buyer pool drying up from the price increases we expected to see a drop in prices. The market can fluctuate but people always have reasons in which to sell property and those buyers outpriced before are still looking for property. For those looking to sell their properties in the upcoming months, regardless of recent rises, the price would need to reflect what buyers can afford, or the property simply won’t sell.

While a housing price crash may seem inevitable to some, with the memory of the global financial crisis of 2008 still lingering in their minds, others predict a different outcome. Our current situation seems to compare closer to that experienced in the late 90’s than the crisis of 2008. The prediction then isn’t a house price crash but a slowdown. House prices will maintain their values or continue to increase but at a markedly reduced rate.

The crisis then becomes less a financial issue and more a social issue, as there is likely to be a greater class divide between those who can afford to buy property and those who cannot.

The cost-of-living crisis continues to make matters worse “as home energy bills are expected to jump again in October.” Those with lower incomes, who are typically renters, are the ones affected by the crisis with the greatest impact. Their increased costs make saving for a deposit much harder, especially as mortgage lenders are already increasing their rates.

However, Bethan Staton at the Financial Times reported that The Bank of England could potentially raise their rates next year and although this would cause mortgage rates to increase, it would also see house prices drop by 5% in 2023 and 2024.

_{Photo by Jevanto Productions on stock.adobe.com}

This drop in house prices isn’t the markings of a crash, though. Those buying properties and keeping them for an extended period of more than 10 years are unlikely to be affected by the drops to the extent that they’ll lose money on the purchase.

However, the price drop isn’t the saving grace it might seem to be for the first-time buyers looking to get onto the property ladder. A recent article in the Telegraph by Melissa Lawford compared the two year forecasts for the house price drops with the current average rent price. It found that first-time buyers purchasing a property now and experiencing the drop in value of their purchase will still end up spending less than if they continued to rent over that period and purchased the property for the lower rate. “The loss would be roughly half what they would have spent in rent over the same period.”

And that calculation isn’t including the likely rise in rent prices that will eat further into the pockets of the first-time buyers who choose to wait for the house price drops in an attempt to save money.

Those first-time buyers who are currently renting are in a difficult position whereby if they don’t purchase soon, they could see themselves either paying more in the long run or being unable to afford the purchase due to the increased monthly costs.

The auction market could be key for those on the edge of that situation as auction properties can still remain affordable and, with the modern method of auction, can still be purchased through financing options like mortgages. More so, the speed and security of the sale is vital in this current market that is teetering on the edge of an unknown future.

Below is a selection of properties we currently have available that are perfect for a first-time buyer:

To see our full selection visit our website.

Guide Price: £100,000

Location: Weymouth, Dorset

Auction Date: 11/05/22

Description: A well-proportioned one-bedroom apartment with allocated parking.

Website Link

Guide Price: £350,000

Location: Oakley, Basingstoke

Auction Date: 19/05/22

Description: A detached three bedroom bungalow in need of refurbishment.

Website Link

Guide Price: £120,000

Location: Hemlington, Middlesbrough

Auction Date: 08/06/22

Description: A well presented 2 bed semi-detached bungalow.

Website Link

Guide Price: £270,000 – £300,000

Location: Weston Super Mare, Somerset

Auction Date: 07/06/22

Description: A semi-detached home in a lovely setting.

Website Link

Guide Price: £100,000

Location: Holywell, Wales

Auction Date: 12/05/22

Description: This two bedroom detached bungalow boasts stunning views.

Website Link

Guide Price: £120,000

Location: Southbourne, Dorset

Auction Date: 26/05/22

Description: A well presented, one double bedroom apartment located just moments from popular Southbourne Grove, and within close distance of award-winning beaches.

Website Link

First-Time buyers need to take advantage of Auction Properties

First-time buyers are struggling to buy property because they are increasingly being priced out of the market. House prices continue to rise, the cost-of-living crisis squeezes their budgets and there continues to be a lack of stock. Yet there is a market of potential properties at auction they are missing because they find the process daunting.

In the past auction has been seen as the playground for property investors and cash buyers but the auction environment is quite different now. With the advent of online auctions and the modern method, auction houses really are a great place for the first-time buyer to find their first home.

Buying a new home is already an intimidating prospect and auctions are perceived as a risky way in which to buy property. Auction properties are often thought of as the problem properties that could not sell through private treaty. They were the properties that needed work to get them where they need to be. That may have been true in the past but that’s not what we are seeing now.

The auction market offers a wide range of properties for various price brackets. There is something for everyone on the auction market. More and more sellers are seeing the benefits of the auction process and we are seeing more properties in excellent condition be put up for auction. As an incredibly secure and fast way in which to buy and sell property, auction is quickly growing as a standard practice for selling property.

For first-time buyers the security and speed can be crucial. For those that are paying rent the reduced timescales can save them months of rental bills when compared to buying through private treaty and the security of the sale greatly reduces the chances of the waiting being in vain as the auction process sees far fewer fall throughs.

“Most auction properties can be sold outside of the live event.”

For inexperienced buyers, the competition of a live auction event can be intimidating but it need not be. Most auction properties can be sold outside of the live event. Buyers can make offers to the seller that, if accepted, are sold under the same auction terms. In this way, the sale resembles a private treaty sale except that the securer auction terms ensure the higher completion success rate.

U.K. Property Market will Not see a Fall in Prices.

The expectation that the U.K property market will see a shift with dramatic falls in house prices is misplaced according to an article by Stuart Trow of Bloomberg.

Although we are seeing lenders transition to a more cautious model and the banks pricing appears to be considering the risk of recession, the market still remains strong.

In 1997, policy makers cut rates as they feared the stability of the financial system after the crisis that choked Asia. The U.K market came to “little harm.”

The global financial crisis of 2008 was a different matter. The reckless lending resulted in house-price inflation spending most of 2007 in the double digits.

Trow uses the example of the fixed five-year mortgage as an indicator of incoming trouble. It’s rare for its rate to drop below the average two-year rate but it happened in the late 90’s, it happened in 2008 and it’s happening now.

But for Trow the current U.K market resembles that of the late 90’s. He says to “expect the U.K property market to experience a slowdown in activity but not a substantial fall in prices.”

He points out that 74% of residential mortgages have fixed rates, so banks may be concerned about the economic outlook but will be less concerned about their existing borrowers.

The crisis that U.K market faces isn’t that it faces a financial crash. It’s the more social issue that the cost of keeping the housing market safe is in the exclusion of the many first-time buyers looking to step on to the property ladder but being increasingly unable to afford to do so.

Auctions Changing the UK Property Market.

We’re entering a new era of property selling, “Only a few years ago, auctions were seen as a last resort to shift a difficult property or make a quick sale where needed,” Says Charlotte Flake of The Negotiator, “All that has changed.” In her article she makes the case that that Auctions are changing the property market and how we should be selling properties.

Auctions are no longer restricted to just cash buyers and investors looking for high yield investments or development and renovation projects, its now seen as an innovative sale model offering both sellers and buyers with a significant increase in sales security. With the market average of around 1 in 3 sales experiencing a fall through auctions have a much higher success rate. Here at Whoobid we pride ourselves on an over 95% completion success rate.

We ensure this security for our sellers by charging the buyer our fee. Which while in itself is a great incentive for our sellers it also increases the security of the sale by having the buyer make an immediate financial commitment to the sale the moment an offer is accepted or the hammer falls.