What do you have to do to complete before the stamp duty holiday ends?
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How does the extended Stamp Duty holiday deadline work?
- Mortgages - Banks and other lenders were reporting weeks of delays with mortgage processing due to COVID disruption and staff shortages. Although most lenders have since improved service, some are still experiencing issues.
- Property searches - Some local authorities were reporting long delays with the supply of searches even before the pandemic.
- Conveyancing - Although home-working was not an uncommon practice for conveyancing solicitors before COVID, many office and support staff were furloughed early on. Many firms lacked the technology and experience to quickly transition to working completely from home.
- Leasehold managing agents packs - Even in normal times, weeks of delays with the supply of managing agents information were common. COVID disruption and high transactions have exacerbated this issue even further.
What can I do to speed up the conveyancing process?
There are several steps both buyers and sellers can take to speed up their conveyancing, to give their transaction the best chance of completing before the new deadline.
Advice for buyers
- Instruct your solicitor as soon as possible.
- Apply for mortgage pre-approval, and complete all documents as soon as you can.
- Complete all the ID verification steps immediately.
- Ask your solicitor to apply for searches as soon as possible. This does mean paying for the searches sooner, but this will easily be offset by the reduced risk of delayed completion.
- If you are a cash buyer, or your lender will accept an indemnity policy in place of local authority searches, you could discuss this route with your solicitor rather than waiting (potentially months) for searches to be delivered.
- Book a property survey ASAP.
- Chase for confirmation of receipt for any forms, documents, questions or answers you send. You could lose a week by assuming an important email was received by your solicitor, only to find it was mis-sent or an attachment was missing when you eventually chase.
Advice for sellers
- Instruct your solicitor as soon as possible, ideally before you find a buyer.
- Complete all the paperwork, including ID documents and TA property forms, immediately - You don’t even need to wait until you have found a buyer.
- If you are selling a leasehold property, ask your solicitor to apply for leasehold management information as soon as possible.
- Locate missing documents like electrical completion certificates and building warranties.
- As with the advice for buyers above, chase your solicitor for confirmation that they have received important forms and paperwork.
Will the Stamp Duty holiday be extended again?
The Stamp Duty holiday was originally due to end on the 31st March 2021. The Chancellor only announced an extension to the deadline in early March, after weeks of uncertainty.
Chris Salmon, Director of Quittance.co.uk said, “There was anxiety among property professionals that the end of the scheme could negatively affect the property market, and conveyancing solicitors were concerned that many in-progress transactions would not complete before the deadline. The extension allowed buyers, sellers and property professionals breathing room to avoid a crunch at the end of March.”
“Although the economic effects of COVID-19 are likely to be felt for years to come, the success of the vaccine rollout in the UK has meant commentators are increasingly optimistic. Increased confidence and a return to “normal” by the end of Summer could offset the impact of the end of the scheme.”
At this stage, it seems unlikely that the deadline will be extended beyond June, although the lower rates between July and September will provide some relief for buyers who are less confident their purchase will complete before 31st June.
‘Normal’ Stamp Duty rates will only apply from the 1st October 2021 onwards. Although rates will be reduced between 1 July 2021 and 30th September, there will still be some duty to pay on properties sold for between £250,000 and £500,000.
If you are buying a property close to the £500,000 threshold for zero Stamp Duty, and it looks like your property may not complete before the end of June, you should take precautionary steps to ensure you can cover the additional Stamp Duty cost.
If your budget is very tight, and there is a risk your purchase could fall through if the deadline is missed, you should plan now. Before things get too tight and stressful, you could discuss splitting any Stamp Duty with your seller. This is likely to be a better option for all sides than the sale collapsing. By exploring your options now, you’ll give your sale or purchase the best chance of completing even if the deadline is missed.