The warning for increased engagement and advice on the conveyancing firm used comes as many buy-to-let landlords seek to complete purchases before the introduction of the new 3% increase in stamp duty costs for additional properties, which will be introduced on the 1st April.
In order to pay the old stamp duty thresholds, buy-to-let and second home purchasers will need to complete before the end of play on the 31st March. Fleet Mortgages is concerned that large numbers of conveyancing firms, without the necessary commitment, resource and specialist skills, will be unable to fulfil the completion of cases before this date.
It believes that advisers should be actively recommending to clients those conveyancing firms who are prioritising buy-to-let and second home transactions.
Goldsmith Williams, for example, recently announced it has made extra resources available for such cases, urging advisers and their clients to instruct as soon as the mortgage application is submitted. It says it will be able to save clients weeks of time by submitting the local search request upon receipt of the contract documents from the seller’s solicitors, starting work on the contract documents as soon as they are received, even if this is pre-offer.
Fleet Mortgages believes more specialist conveyancing firms will need to prioritise cases in a similar way in order to ensure clients complete on time.
It also said that in specialist cases, such as where buy-to-let landlords are purchasing through a limited company, advisers and clients would need to instruct specialist conveyancers with the necessary skills, experience and expertise in this area. It urged advisers to talk to lenders active in these sectors in order to find out which conveyancing firms would be best placed to take on such cases.
Bob Young, Chief Executive Officer of Fleet Mortgages, commented: “At this time in the mortgage marketplace, the choice of conveyancing firm has never been so important. With the stamp duty deadline less than two and a half months’ away, there has been (understandably) a huge amount of interest from buy-to-let landlords wishing to purchase before the 3% increase kicks in. Much has been said about lender capacity and whether we can deal with the rise in enquiries, however to my mind it is not the lender that the adviser or client needs to worry about.
For instance, we can turn around offers and deal with full mortgage applications quickly, however can the same be said of those in the conveyancing process. It’s a matter of fact that not all conveyancing firms are the same, and choosing the wrong one at this juncture will mean the client probably has no chance of hitting that deadline, which will leave everyone frustrated.
It’s therefore very encouraging to see firms like Goldsmith Williams announcing it can prioritise such cases, giving the client every chance of making that 31st March deadline. Of course, there are can be no guarantees the transaction will complete as there is much that can cause delays and many prospective purchasers will be in very long chains. However, what you want from a conveyancing firm at this time is an understanding they are fully aware of the time pressures, they have the necessary resource to deal with the work and its requirements, and they are going to do everything they can in order to make it happen.
The other important point that should be made is around specialist cases, such as we deal with limited company buy-to-let. While there are thousands of conveyancing firms out there, only a relatively small number may know how to work such cases and give the client the best shot of pre-April completion. This is why we are urging advisers to talk to lenders like ourselves about those firms who fit this bill. There is very little point in selecting a firm which is not part of this specialist group as you are hindering your client before they’ve even started. Advisers can play a very significant role in the conveyancing process and it starts by ensuring the right firm is chosen.”
