Our latest Residential Market Research is now available.
 
Recently, Landmark interviewed 100 residential property solicitors and conveyancers in England, Scotland and Wales. We spoke to managing partners, heads of residential property law, fee earners, residential property solicitors and other directors. 

We gained invaluable insights into the residential property market, and it showed us what’s currently of concern to conveyancers and where they see future opportunities to help drive the success and profitability of their business. 

For example, within the last 12 months, incomplete information has meant our respondents have needed to raise enquiries in an average of 46% of cases, hence perhaps why 53% say having upfront information to assess the complexity of the work would have the biggest impact on profitability.

The Q4 2023 edition of Landmark’s Residential Property Trends Report is now live. Within the report, you’ll find the latest data from the residential property transaction pipeline, including listings, SSTC/SSTM, searches ordered and completions.

This is a market poised for return. Whilst supply remains consistently robust, subsequent pipeline metrics such as SSTC / SSTM, searches ordered and completions are still flat.

Key findings from Q4 ‘23 include:

• Listing activity in England and Wales in Q4 ‘23 registered the same volumes recorded in  Q4 ‘19.  
• Completions dropped in England and Wales in Q4 ’23 – 38% lower than Q4 ‘19.
• In Scotland, listings for Q4 ‘23 were 9% up on Q4 ’19, but completions were subdued by 13% vs Q4 ’19.
• Overall, dispute healthy listings, the residential pipeline remains constrained.

Landmark’s major new cross-market report has uncovered the top challenges and priorities for 2024 shared by estate agents, conveyancers, surveyors and lenders across the transaction chain.  

Our new cross-market report found that market challenges and the length of time it takes to complete a transaction to be among the top frustrations shared by all residential property professionals. 

The report, entitled ‘Future Thinking: what’s driving property professionals into 2024?’, features the views of hundreds of estate agents, conveyancers, surveyors and lenders.  

A striking convergence  

Our findings highlight some of the challenges and frustrations that senior property professionals are currently prioritising and sense-checks these against the aspirations of home movers.  

Here are some of the key headlines:  

• Economic headwinds have clearly affected the sector, with over 75% of all groups citing the current economic climate, interest rates and the cost of living as a leading business concern for the next year.   
• The length of time to complete a transaction was a top three frustration in the transactional process for estate agents (37%), surveyors (40%) and lenders (36%).
• The ever-increasing regulatory and admin burden placed on property professionals appeared as a top five frustration for all four groups, with lenders ranking highest in this area, with 55% agreeing.  
• All groups spent over 20% of their working days chasing or being chased – with poor communication among stakeholders cited as a top five frustration for estate agents and conveyancers in particular.   
• Looking ahead, better technology and less administration were seen a key for all groups in improving efficiencies and reducing costs. 

Protracted timeframes  

Our research also canvassed the views of 500 home movers, with this group also sharing the sentiment expressed by property professionals to speed-up transactions. In fact, the majority of consumers aspired to wrap up their home moves within an 8-week timeframe – which is in stark contrast to the current average transaction time of 19 weeks1.  

A desire for digitisation  

The report also highlighted a remarkable consensus regarding the best solutions to addressing these challenges. Digitising workflows featured highly for three of the four groups, with surveyors (63%) and lenders (55%) ranking it as the leading factor that would have the biggest impact on productivity, and estate agents placing it third (41%.)   

Simon Brown, CEO, Landmark Information Group says:   

Access our new market research report here.

As the housing market and economic outlook continues to fluctuate the cash buyer market sector recently hit an eight-year high.

More and more non-mortgage clients are entering the market looking to secure their next short or long-term investment, and each one has the sought-after incentive of being chain-free, and good to go. 

This this blog, we take a deep dive into the current Cash Buyer Landscape, by pitching questions to OneSearch’s head of Sales, Robin Wells…

1. With current economic trends around higher interest rates and low availability of mortgages, have cash purchases increased? 

It goes without saying the property sector has taken, and is still taking an unprecedented number of hits, with the initial challenges stemming from the wake of the pandemic. But our resilient market has been further tested by the war in Ukraine and the subsequent cost of living crisis together consistent interest rate increases over the last 12 months.  

I think it’s important to understand that cash purchasers and purchases have always been prevalent in our marketplace, but naturally these transactions will inevitably increase when the sale of property (especially) distressed sales become more frequent and mortgaged buyers less plentiful. 

2. Without the need for a lender, and therefore searches not strictly being required, should cash buyers look to protect themselves? 

It’s critically important to understand that searches play a vital role in a property transaction and whatever the circumstances a full range of searches as advised by a conveyancer is always the best way to get all the property information required to make an informed decision. However, some cash purchases are negotiated by buyer and seller and the timescales of search delivery can fall out of these agreed parameters, so some form alternative safeguard maybe required to enable the purchase to proceed. 

3. How can conveyancers help prospective cash buyers reduce the risks involved with a cash purchase? 

As stated before, a full suite of searches is the first and foremost the best way of providing clients the property intelligence required to transact safely. However, when a lender is not present within the transaction, a suitable insurance policy can be obtained to protect the buyer from any loss of property value or claims that may arise from not taking usual route of ordering a full search pack and the missing data within the searches not being present. 

4. Is there a more robust way to increase the cash buyers due diligence as opposed to just insurance? 

Yes, our Cash Buyer Express is a combined solution that provides some really useful property search data, such as Planning information and planning permissions, nearby road schemes, road and railway schemes, and this is nicely wrapped up with a really robust insurance policy that adds a greater layer of cover for the buyer.  

With all these barriers bypassed, wouldn’t it be good to have an added layer of protection and security without jeopardising a speedy transaction? Our infographic highlights the routes available to your clients, and how OneSearch’s Cash Buyer Express gives your clients the best of both worlds.  

The Q3 2023 edition of Landmark’s Residential Property Trends Report is live. Within the report, you’ll find the latest insights into the residential property transaction pipeline from listings to SSTC/SSTM, and from searches to completions. 

Whilst supply is holding up, subsequent pipeline metrics such as SSTC / SSTM, searches ordered and completions remain low.

Key findings from Q3 include:

• Listing activity is up in England and Wales – 1% higher over Q3 ’23 vs Q3 ‘19.
• Completions dropped in England and Wales in Q3 ’23 – 35% lower than Q3 ‘19.
• In Scotland, listings are 4% up on Q3 ’19, but completions are subdued by 18% vs Q3 ’19.
• Overall, supply is still struggling to progress through the pipeline.

Download the Cross Market Activity edition for England, Wales and Scotland, and view the latest residential property market data for Q3 2023.

We hope you find the report helpful.

The residential property market has experienced a number of extreme stressors over the past 18 months: the cost-of-living crisis, rising inflation, rising interest rates, and the fall-out from last September’s mini-budget … not to mention the economic effects of the war in Ukraine.  

No wonder overall market activity is down and transactions in 2023 are running at around 85% of the pre-Covid average (2015–2019). All this considered, you might think that every area of the market would be suffering. But there’s one market segment that’s showing remarkable resilience:  

The non-lender buying sector, aka cash buyers.  

In this blog post, we’ll look at the reasons behind that market resilience. But also, what are the potential risks for non-mortgage purchasers? And how can you help your cash-buyer clients make more confident investments, without sacrificing the strength of their negotiating position?  

Cash purchases on the rise 

According to statistics recorded by Savills, cash buyers accounted for nearly 8 out of 20 transactions (38.5%) in January 2023. By contrast, mortgaged home movers accounted for just over 5 out of 20 transactions (25.3%).   

Since then, cash buyers’ share of the market has continued to grow. In an upcoming OneSearch webinar featuring Savills Director of Residential Research, Emily Williams, it points to data showing cash buyers comprised about 46% of all transactions in April 2023 – up from around 34% in late 2022. 

The proportion of cash buyers is even higher in prime markets. In those areas, buyers tend to be less dependent on mortgage finance. For instance, this year in prime central London as many as 14 out of 20 buyers (71%) have purchased using cash only. That’s up from around 12 out of 20 buyers (60%) in 2022. 

What factors are contributing to this resilience? 

Cash buyers have, in fact, represented the largest market segment since 2011.  

One reason for their apparent recent growth is down to the surge in lender-backed purchases post lockdown. Increased activity from mortgaged home movers saw cash buyers’ market share squeezed between 2020 and 2022.  

Since March 2021, we’ve seen the proportion of mortgaged-backed purchases drop from 1 in 3 transactions to around 1 in 4. And while the market turmoil in the wake of the mini-budget made the headlines in October 2022, a noticeable falling-off in transactions has been evident since the stamp duty holiday came to an end in September 2021. 

In large part, the dampening effect in the market stems from the cost of borrowing going up. That continues to be the major constraint on first-time buyers and mortgage-backed home movers. 

But part of cash buyers’ market strength is also down to their comparative ability to move fast to completion. This can make them an attractive proposition to many sellers. Indeed, those with access to readily available funds can often negotiate a reduced sale price on the basis of a time-limited offer. 

Yet a determination to move fast can see cash buyers take on risks that mortgage lenders would not. 

To search or not to search? 

It’s imperative to understand that searches play a vital role in a property transaction and whatever the circumstances a full range of searches as advised by a conveyancer is always the best way to get all the property information required to make an informed decision. However, some cash purchases are negotiated by buyer and seller and the timescales of search delivery can fall out of these agreed parameters, so some form alternative safeguard maybe required to enable the purchase to proceed. 

Bypassing the searches altogether however, is ill-advised. Property searches typically only cost a little extra; the possibility of  local authority delays mean that delays could push completion, back several weeks, which is why your cash buyer clients may want to skip this part of the conveyancing process – particularly if they have negotiated a sale using a timescale caveat (e.g., exchange in 31 days). 

Fast forward a couple of years, however, to when your client is looking to sell: a more prudent buyer’s searches could uncover defects that were there to be discovered. Defects such as: 

• Unauthorised building works
• The property’s location on a floodplain  
• The lack of connection to a sewerage network 
• Planned changes to traffic schemes  
• Proposals for a nearby railway 
• Previously rejected planning permission applications
• And many more. 

These types of defects can significantly affect the resale value of a property. Not only might your client be unable to achieve the profit they had expected to make, but they might struggle to persuade other buyers and their lenders that their property is worth anywhere near what they paid for it.  

Buyer beware 

Why might a vendor be keen on a quick sale? Why might they be happy to accept a low offer? And why might they be marketing their property as for ‘cash buyers only’?  

These are questions your cash buyer clients should be asking themselves. 

It may be that the seller simply wants a fast and uncomplicated sale. Perhaps they need the proceeds quickly and don’t want to risk a sale falling through. So they’re prepared to accept a lower price to guarantee a speedy transaction. 

Those are the good scenarios. But it could be they’re trying to rush through a sale so that known defects aren’t looked at properly. And because of the rundown condition of the property, perhaps they suspect that a mortgage provider won’t lend funds to a would-be buyer. 

As corner-cutting goes, not undertaking searches can be particularly dangerous. Which is why mortgage lenders would never take the same risk. And why, at OneSearch, we believe a full suite of conveyancing searches remains the best way to gain a true picture of a property and its history. 

But now there’s a new way for your clients to secure a level of protection, without jeopardising a speedy transaction or risking a drop in the property’s onward sale value. 

Introducing Cash Buyer Express  

Created for an area of the residential property market where speed is paramount, Cash Buyer Express from OneSearch has been designed with time-sensitive purchases in mind.  

It’s the perfect solution for those cash buyers who don’t want to put transactions at risk but who want to be better informed and suitably protected. The ideal tool for those who don’t want to risk waiting 6–7 weeks for searches to come back, but who want to feel more confident in making what is, after all, a significant financial investment. 

How does it work? 

Peace of mind… at pace 

OneSearch is the only company to hold a national database of most of the available local authority data on every property in England and Wales. 

Cash Buyer Express provides up to 70% of the information you would normally get from local authorities. But your clients can expect results in as little as 24 hours, so there’s no hanging around.  

In practical terms, a sale will go through just as fast with or without Cash Buyer Express. The difference is your clients will be better informed. More importantly, they will have the security of an insurance policy covering a reduction in the property’s resale value from unidentified defects.  

Protection… on purchase 

Your clients are protected by a £1 million No-Search Insurance policy with Aviva. This is tailor-made for non-mortgage transactions and provides cover for: 

• A search of the local land charges register on form LLC1 

• A search of CON29R and/or CON290 records 
• A search of water and drainage records on CON29DW 
• A search of the coal authority’s records on form CON29M 
• An environmental risk assessment 
• A full chancel repair liability search 

The policy will compensate your clients for the difference between the price they pay for a property and any subsequent reduction in value caused by unidentified issues – for example, the existence of a public right of way – that a full local authority search would have revealed. 

In a nutshell, Cash Buyer Express gives cash buyers clarity, confidence, and complete peace of mind – without delay.