Neil Riley, head of our residential conveyancing team, explains how the continuing impact of Covid-19 is affecting property sales and purchases…
Is my house sale likely to be affected as a result of this latest national lockdown?
Whilst the latest lockdown does not impose any restrictions on house buying or selling, the disruption caused by Covid-19 continues to be felt across all aspects of society and unfortunately, the conveyancing industry is not immune.
In practical terms, estate agents, mortgage brokers, financial advisers, surveyors, mortgage lenders and solicitors have all had to adapt to a different way of working. Often, these companies have employees working remotely due to the restrictions on numbers of people in an office and staff are absent because they are self-isolating, ill, or caring for family members. As a result, we are finding that processing times for mortgage applications, surveys and searches have increased significantly, which is impacting on conveyancing transactions.
I agreed to buy a property two weeks ago. Will I be able to complete the purchase before the stamp duty thresholds change?
In short it is impossible to say. Since the beginning of July following the chancellor’s announcement to increase the threshold at which point stamp duty becomes payable there has been a dramatic increase in the number of people looking to buy property and with stamp savings as much as £15,000 it is hardly surprising.
The stamp duty holiday is set to end on March 31 this year, which means there is now incredible pressure from purchasers to complete transactions as quickly as possible. This huge demand has put additional pressure on an industry already struggling to cope with the changes brought about by Covid-19. Recent industry figures suggest the average transaction time has stretched to 18-20 weeks, whereas pre-Covid, we would have expected to complete most cases within 8 to 12 weeks.
Our teams are working incredibly hard to ensure every transaction can be completed as quickly as possible but each property transaction is unique and involves different buyers and sellers and a whole host of other parties and organisations This is especially so if your transaction is part of a chain, which means your ability to proceed will depend on the slowest link in the chain. We have taken steps internally to try and minimise the impact of Covid, such as setting up dedicated teams to deal with certain parts of the conveyancing process, but many of the delays with mortgages, surveys and searches, for example, are out of our control.
What happens if my purchase can’t complete before stamp duty returns to the pre-Covid rates?
The deadline imposed by the stamp duty holiday has increased the financial stakes for buyers significantly. Failure to complete before March 31 could result in the tax becoming payable at ‘normal’ rates unless the current stamp duty incentives are extended.
Unfortunately, we cannot guarantee any transaction will complete before a given date and stamp duty will be payable at the prevailing rates on the completion day, so make sure you have sufficient funds or a contingency plan in place, should you be unable to complete by March 31. If you wish to discuss the possible impact of changes to stamp duty on your property purchase, please speak to our conveyancing team at your earliest opportunity.
Is the Stamp Duty Holiday likely to be extended?
The conveyancing industry is currently lobbying the government to extend the stamp duty holiday and we will continue to monitor the situation closely, but at this stage the government have not given any indication that the current incentives will be extended.