Residential property expert, Kate Bould, who works with property lawyers and conveyancers, suggests that house buyers and sellers should be warned that the delays mean there’s a real chance they will miss the 31 March deadline, so they would miss out on the cash savings of as much as £15,000 for a £500,000 property.
She says: “We have plans underway that will ensure our team can do everything possible to support our property solicitor and conveyancer clients to get purchases and sales as close to completion as soon as possible - starting now but especially as we get closer to the end of March 2021 deadline."
The volume of houses being listed for sale and the speed at which they are selling has reached record numbers since August.
Kate explains: “The number of homes selling within a week of coming to market has reached its highest point in 10 years, according to analysis from Rightmove, and new vendor enquiries into estate agents this month (September 2020) are up 64% on the first week of September 2019.
“Whilst this is good news for the property sector and the economy, the knock-on effect is that the sheer volume of transactions means everything is backing-up. Not only will it take time to get on top of this backlog, if property transactions continue at this rate over the coming six months, the delays will mean many property sales simply won’t complete in time to qualify for and benefit from the SDLT changes before the scheme comes to an end in March.”
The Chancellor’s stamp duty land tax holiday means all homebuyers in England and Northern Ireland purchasing homes valued at up to £500,000 don't pay any stamp duty on the purchase, so long as it is completed by 31st March next year.
Kate says that a number of solicitors are also already taking steps to stem the tide: “Many solicitors would rather turn away new business than risk reputational damage, bad client reviews and potential claims for missing the stamp duty deadline. Several law firms we work with have taken the decision not to accept new purchase cases after the 1st January 2020 – with some saying they won’t take on any new transactions after the 15th December this year.
“Others have already issued warnings to clients about the possibility they will miss the 31 March 2021 deadline simply because of the backlog for searches at local councils, with others asking clients for confirmation of extra funding availability should stamp duty need to be paid if the deadline is missed.
“All in all, this signals the likelihood of a pretty messy and fraught end to the Stamp Duty Land Tax holiday,” she says.
According to the latest ONS House Price Index figures for the West Midlands published on the 16 September, house prices in the region rose by 4.1% in the 12 months to June 2020. Nationally, homes selling within a week is up 125% compared to the same period last year and 28 per cent higher from its previous peak in February 2016, before the Brexit vote. Some 30% of homes sold within two weeks of being listed, up from 21% in 2019.
Properties are selling the quickest in Scotland, where a third of three-bedroom semi-detached houses are being snapped up seven days after being listed - an increase of 20 per cent from last year’s figures. London is the slowest market, with one in nine homes being sold within the first week, but this is still an increase from the one-in-20 that were sold in a week last year.
Kate concludes: “Of course 31 March 2021 is six months away, which may seem a long way off and plenty of time to get house transactions finalised, but getting a property ready to sell, appointing an agent, finding a buyer, and then going through the conveyancing process takes time, and doesn’t leave much room for any unexpected delays."
