With the stamp duty holiday now a distant memory and interest rates on the rise, the property market still continues to boom – at least for the foreseeable future.

Although this phenomenon now solely appears to be fuelled by a shortage in the supply of new instructions, there seems to be little problem with the public’s appetite to snap up virtually anything and everything when it comes to bricks and mortar (despite the long wait for the front door keys).

According to analysts TwentyCi, it is currently taking an average of five months (21 weeks) from the time a sale is agreed to completion here in the UK. To put that in context, it takes as long today as it did a year ago at the height of the stamp duty holiday frenzy.

In essence, it would seem that conveyancing and search services are still trying to clear the pandemic backlog, with the time it takes to obtain a local search a complete post code lottery. Response times are reported to vary from five days to as long as seventy working days (that’s right 70 working days!) according to the company SearchFlow, a local search provider. Meanwhile, the process of digitisation of local searches by local authorities continues at what seems like a snail’s pace, and is anything but comprehensive throughout the country.

Yet, there seems to be great expectancy amongst estate agency firms that stock levels are on the cusp of returning to some level of normality. However, with current number of homes for sale at its lowest since 2008, it would appear we are a long way away from the “normal” that most estate agents clearly seek.

The answer to solving the property “supply” issue must surely lie in either building more homes and/or incentivising potential vendors to sell. Alternatively, on the opposite side of the equation a reduction in demand has historically occurred by an increase in the cost of buying (which ironically has already started to happen via surging inflation, rising interest rates, and a general increase in the cost of living).

Interestingly, Colin Bradshaw MD of analysts, TwentyCi stated that he believes that the housing market is “already broken and requires government intervention, as the only real impetus here is a change in stamp duty, yet again – but this time not a holiday”. Call me old fashioned, but was it not government intervention (via the SD holiday) that made an already difficult supply situation much worse by an artificial manipulation of demand!

Either way, it seems to me that however welcome (and popular) a further revision in stamp duty rates would be, wouldn’t this simply just make matters worse? After all, with conveyancing and search systems still creaking, isn’t the housing market still in recovery from the frenzied buying of the last year or two?

Either way, the supply “crisis” in effect means that for the moment at least, there is nowhere to move to – which is inevitably a source of great frustration to a great many homebuyers, but how do we fix it? Indeed, can the government fix it? Well who knows, but I believe that the government might well want to take action in the following areas

  • End to the practice of “land banking” by the large UK house builders, as we can all agree that we as a nation do not build enough new homes on an annual basis.
  • Conduct a thorough review of the archaic way that we transfer property ownership here in the UK.
  • Speed up the digitalisation of local authority records, so that local searches can be carried out within days and NOT weeks.
  • Address the chronic under funding of local authority planning and building control departments in order to enable the planning system to work properly.

The points I raise above may not fix the UK property market entirely, but they certainly would help a great deal in making it work more efficiently.

The author of this article is Peter Nicholls, CEO of Ideology Consulting Ltd. For more information about Ideology Consulting, go to www.ideologyconsulting.co.uk