Introduced in July, the stamp duty holiday has been one of the key factors creating a mini-boom in the UK property market. But now the deadline is coming up on the 31st of March, on the same day as the furlough scheme ends, what impact will this have on the conveyancing system?
In this months’ property market update, we assess the impact of the SDLT holiday so far, and hear from Senior Associate Farah Syed on how the Laurus team are managing the upcoming stamp duty holiday deadline.
Prices returning to normal?
As sellers try to secure a faster sale to avoid missing out on the stamp duty holiday, the average price of properties coming to market has dipped by about 0.5%. However, demand from buyers is still strong, despite England entering a second lockdown 4 weeks ago. Rightmove advises sellers to come to market at a more competitive price for the highest chance of making a quick sale – you’re still less likely to get offers if you revise your price when your initial asking price was too high.
Stronger growth in mid-high bands
There’s undoubtedly been a boost in activity across the board in the UK since the housing market reopened. But data suggests that the stamp duty holiday, which was introduced in July, has had a significant impact on these trends. Bands where buyers are set to make the biggest savings have seen the most activity – for example a 106% increase in sales agreed in the £400,000 – £500,000 price bracket from this time last year. This does mean when the effect of the stamp duty holiday wears off in the new year, activity in the market may slow down.
Am I going to miss the stamp duty deadline?
Some experts have been warning that unless you’re in the process soon, you’re going to miss the March 31st deadline. However, it doesn’t have to take 3 months to go through conveyancing – if you can get a good team around you, then you haven’t missed out yet, Farah Syed, a Senior Associate in Laurus’ property team says.
“As long as you’re keeping clients absolutely updated and aware of next steps, it’s still possible to get a fast turnaround. Having a commercial outlook and getting ahead of the game can shave weeks off of the process, which is crucial. For example, if my client is on a tight deadline, we can avoid wasting time waiting for a draft contract and download deeds for the buyer to approve and start carrying out searches straight away. Ultimately, the stamp duty deadline is just like any other deadline, and we’ve proven many times we can pull out all of the stops to get to exchange in as little as two weeks.”
With our Sale Ready service, we have been making sure sales can go through as quickly as possible for years now – all it takes is a proactive, dedicated lawyer.
Will the chancellor extend the stamp duty deadline?
Experts have suggested that the abrupt end to the stamp duty holiday will create a strain on the conveyancing system, as clients feel pressured to take advantage of the savings. Andrew Wishart, of Capital Economics has even warned of a ‘damaging downturn’ should the deadline not be extended. Many in the industry have warned of a backlash from those who will miss out if they can’t complete before the 31st, and a transitional period has been suggested in order to prevent disappointment.
However, there are ways for solicitors to mitigate the pressure on clients – and themselves. Farah tells us:
“Our internal structure is going to be really beneficial while the pressure is on, because we’ve got people dedicated to certain parts of the process ensuring transactions don’t get held up, and we can focus on the legal aspects and client. We're always thinking outside of the box to bring solutions to clients. We want to make sure clients are almost hugged by a team of solicitors and agents, all working together to monitor timeframes and communicating daily. Our one-to-one relationship with clients means they feel supported all the way through to exchange.”
Having an efficient team around you is vital, as the transitional period is not guaranteed. The tax holiday has been quite effective at stimulating the housing market, with a government report stating that Q3 SDLT transactions were up 68% on last year – but with losses from extending the furlough scheme and other financial relief, the government will be looking to taxes for another source of revenue.
What does this mean for you?
There’s still time to save on stamp duty if you’re thinking of buying a home, as long as you have a proactive team around you. At Laurus, getting your deal through quickly is our top priority. Be sure to make it clear to your property team if you’re trying to avoid missing out on stamp duty savings. The holiday ending may also have implications if you’re planning on buying after March 2021 – so keep an eye out for our 2021 property forecast for everything you need to know.
If you are looking to make a move in the property market yourself or would like to speak to our property team about referring a client, please don't hesitate to get in touch on 020 3146 6300 or firstname.lastname@example.org.
*SDLT at a Glance: Source
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