House sales collapse as probate delays climb to a year

A pedestrian walks past the headquarters of Her Majesty’s Revenue and Customs (HMRC)

House sales are falling though as bereaved families face year-long waits for legal “probate” documents held up in a civil service backlog.

Families have been left waiting up to 11 months for a grant of probate – the crucial legal document required to sell the home or assets of a dead person, lawyers have warned.

The average waiting time for a grant has soared year on year from nine weeks to fifteen, according to official statistics. Lawyers say the documents should be turned around within a month of application.

Delays can cause serious financial hardship for families, leaving them unable to access funds to pay urgent bills. Banks will often release funds ahead of probate up to a certain threshold, usually £50,000; however a house cannot be sold until probate is granted.

Delays can also risk families having interest charges added to their inheritance tax bills if they are not paid within six months of death.

Long waiting times can also prevent the sale of the deceased’s house, increasing the risk of families paying interest on inheritance tax payments.

The Society of Trust and Estate Practitioners has blamed the delays on inexperienced staff. The professional body said the loss of senior staff at probate registries had coincided with an increase in errors and contributed to particularly long delays for complex cases.

It said there had been a “marked increase” in the number of grants issued with spelling mistakes and missing information, such as the name of one of the executors. Submitting evidence to a Justice Committee inquiry, the trade body urged the HM Courts & Tribunals Service (HMCTS) to outsource complicated cases to experienced law firms in order to reduce the backlog.

Emily Deane, of STEP, said: “Practitioners are telling us that house sales are falling through due to probate delays. People are taking out loans to pay for inheritance tax which is due before probate is granted. Immediate action is needed now.”

Inheritance tax must be paid within six months of the date of death. If the executor is reliant on the sale of a house in order to cover the cost, they may have to pay the bill in instalments with interest.

The interest HMRC charges on late payments of tax has risen in line with the Bank Rate to hit 7.75pc. Alternatively, families may take out loans to pay the bill – but they will be charged interest on the loan.

The Justice Committee launched an inquiry into probate delays last November. In response, STEP surveyed probate practitioners and found that all of them had seen house sales cancelled because of the delays. Meanwhile, 67pc said applications were being stopped due to errors made by the probate registry.

Applications that have been “stopped” because of their complexity are taking on average 24 weeks to complete, data from HMCTS shows.

The probate registry will send email responses from probate lawyers working on “stopped” applications to the back of the queue – sometimes adding four to six months to the wait times, STEP said.

The professional body added that the shift to online probate services in 2019 had led to “a significant number” of senior staff members leaving.

There are currently fewer than three full-time equivalent registrars and deputies in the probate registry workforce where previously there were 30.

On top of this, it noted that “the move to now limited working from home” since the pandemic had not helped delays, although it added this was not the root cause of the issues. Before the pandemic, a straightforward application took on average a month to process. STEP has said the turnaround time should be brought down to within 28 days.

As well as outsourcing complex cases to law firms, the professional body recommended that HMCTS recruit more experienced staff and focus on training up its recruits in order to meet this target.

HMCTS was contacted for comment.

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