“Severe delays” and a “large backlog” in home sales may result in people missing out on the stamp duty holiday, housing experts have told Sky News.
The sector is under pressure as 140,000 more people than last year are waiting to complete the process of buying a property, according to Zoopla.
It reports that 418,000 sales across the UK – worth a total of £112bn – are in the pipeline but are yet to be completed.
Stamp Duty Land Tax (SDLT) must be paid if you buy a property or land over a certain price in England and Northern Ireland.
In July, Chancellor Rishi Sunak announced that property transactions up to £500,000 will be exempt from SDLT.
Homebuyers are now looking to make the most of the stamp duty holiday, which finishes on 31 March 2020.
But estate agents are warning that the surge in demand may cause potential buyers to miss the deadline, meaning they’ll lose out on savings of up to £15,000.
“We are indeed experiencing severe delays and a large backlog with property sales across the market,” Robert Muat, managing director of estate agent Laurel’s, told Sky News.
“In our experience this is causing huge distress to many of our clients and is also resulting in the average time being taken to progress a sale – between offer acceptance and exchange of contracts – to increase by almost 30%.”
Mr Muat says outdated systems are largely contributing to the delays that overall may affect people benefiting from the temporary tax relief.
He said: “Mortgage offers are often still sent using fax machines (by lenders and solicitors) which is obviously unsustainable as most people working from home do not have fax machines.
“In our opinion, these delays will almost certainly affect the market and the ability of people in the coming months to take advantage of the stamp duty holiday.”
Mr Muat has said there needs to be urgent action.
“Unless something is changed in the next couple of weeks then the likelihood is that thousands of buyers will miss out on the stamp duty holiday across the country.”
He is calling on the government to “consider extending” the March deadline “to take away the risk of people missing it”.
Nick Leeming, chairman of estate agents Jackson-Stops, said those looking to exchange before the stamp duty holiday deadline “should look to have an agreed offer in place by December latest”.
He said: “The savings buyers can make from the SDLT holiday coupled with the pent up demand from the housing market’s closure, has resulted in a surge in transactions.
“This has stress tested the entire home buying system; agents have been working at full capacity, mortgage advisers are experiencing delays with lenders and conveyancers are under severe pressure.”
Zoopla’s research and insight director, Richard Donnell, said time is desperately running out for those who want to save money by not paying for stamp duty tax on their property.
He said: “Those who leave it to January to start their search for a home will be cutting it fine.
“Just half of sales agreed in January will convert into a completed sale by the end of March, so those looking to beat the stamp duty deadline will need to be well prepared.
Mr Donnell added: “Finding an agent before Christmas and instructing a conveyancer to prepare all the sellers legal information will be essential to boosting the chances of saving up to £15,000.”
Zoopla’s latest report has highlighted the story of 28-year-old Amy Williams, who was able to secure a flat in London because she was able to benefit from the tax break.
She hopes to exchange on the one-bedroom flat in Camberwell before mid-November in order to save £4,000 in stamp duty costs.
Ms Williams said: “The timing couldn’t have been better and, without the SDLT relief, I wouldn’t have been able to afford my property.
“If anything goes awry with the sale now, and if the vendor were to withdraw, I’d be back to square one and very nervous about being able to find a new property and complete in time to beat the stamp duty deadline at the end of March.”