Two of the most outspoken agents in the industry have criticised those calling for an extension to the stamp duty holiday - with one accusing agents of “feigning hysterics.”
Yesterday the momentum for an extension to the current March 31 deadline grew stronger, with an online petition in support of the move reaching over 75,000 supporters and the Daily Telegraph launching its Stamp Out The Duty campaign, aiming to persuade Chancellor Rishi Sunak to extend the deadline.
The Telegraph’s campaign launch article recruited support from industry heavyweights including TV market commentator Phil Spencer, Hunters chief executive officer Glynis Frew, and Beth Rudolf of the Conveyancing Association.
But on Twitter outspoken buying agent Henry Pryor poured scorn on the Telegraph campaign saying: “ *sigh* In the midst of a pandemic extending the Stamp Duty holiday is front page news over at the Telegraph.”
The industry figures quoted in the article spoke of what they saw as the need for the market to keep faith with buyers who committed to a purchase well ahead of the deadline.
However, Pryor questioned this by saying: “See if you can find just ONE contributor whose business doesn’t benefit from the Stamp Duty holiday.”
Separately Russell Quirk - a Keller Williams franchise holder and head of PR firm Properganda - says the holiday has had a clear and positive effect on the market but he has accused some of those calling for an extension of “feigning hysterics”.
He says the view is justified by a poll of over 1,000 homebuyers stating that only 29 per cent had been inspired to move because of the stamp duty holiday - thus showing 71 per cent were not.
He adds: “Whilst agents may be screaming at [Chancellor] Sunak on the TV, pleading for him to extend the tax relief, they should take comfort in the fact that it appears the market will stay strong regardless.”
Quirk continues: “There are some people suggesting that all of the 250,000 transactions currently in the UK property pipeline will fall through the instant we reach midnight on April 1. This is bonkers and wrong. Even if the stamp duty holiday does end as currently scheduled, many of those transactions will have completed and 30 per cent of those which haven’t will be first time buyers who are exempt from SDLT anyway.
“Therefore those who are feigning hysterics that everything in the pipeline are being swept along by media hyperbole.”
Meanwhile three prominent conveyancing organisations have now reiterated their call for an extension of the holiday.
The Society of Licensed Conveyancers, the Conveyancing Association and the Bold Legal Group - who combined represent law firms that undertake the majority of home sales and purchases in England and Wales - wrote to the Chancellor back in November seeking an extension, but say now that the lockdown and continuing delays in handling transactions add to the urgency of their request.
Bold Legal Group founder Rob Hailstone says: “Our members are seriously concerned about the impact that the ‘cliff edge’ effect of the March 31 removal of the SDLT benefit will have. Many of their clients are saying that they will withdraw from their purchases if they do not complete by March 31, causing chains to collapse and seriously damaging the property market.
“The consequences will particularly effect those who are involved in ‘must move’ transactions. The attendant waste of time and money, and the impact of stress on people already struggling with the effects of Covid is entirely avoidable by the government extending the SDLT holiday and introducing a tapering off of the scheme in coming months.”
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The calls from conveyancers for an extension is a desperate hope for an easing of the current workload.
The current situation is highlighting how in the last decade and a half competence levels amongst conveyancers has dropped through the floor.
Thee weak link in the housing market isn't the method, it isn't the agents, it isn't the movers. It's woeful service from conveyancers.
As I said when commenting on an article re Stamp Duty last week, the most sensible course of action would be a tapered end to the Stamp Duty Holiday. It's not really a question of extending it so that we can keep the market flying, it's more a question of allowing those transactions currently in the pipeline to benefit from it. We all know that there will be a mad scramble as we get closer to the 31st March and that conveyancers will not get many of these transactions done in time because of the volume of work they currently have on their plates.
Transactions are still being agreed and therefore adding to the already overburdened system. Much higher levels of sales were agreed at the latter end of 2020, so it is not surprising that Conveyancers, lenders and Searches are taking longer, with fewer staff Stop blaming the Conveyancers. Perhaps Rishi will consider drawing a Stamp Duty line for sales agreed say, up until 24 Dec. Anything after that will not benefit from the SD holiday, as in the current climate, it is not going to Complete by 23 March. No point adding sales to something already overstretched, beyond reason. Agents can then concentrate on getting the existing sales over the SD holiday line. I don't believe that people are only moving because of a SD holiday, if so, then c25% of sales will fall through, if they fail to Complete by 23 March. Stay safe everyone 😷
23 = 31March!
This apparent FT cliff in March doesn’t make sense, and extending it only kicks the problem a bit further down the road. Firstly, surely all these deals that were tied up from about September onwards were done so with a lot of "what if" stress testing on buyer, seller and the chain regarding the deadline. I suspect many weren’t though based on the adverts I still see in January saying "Beat the stamp duty deadline, buy from us" with just 10 weeks to go. It is clear that a chuck mud at the wall approach has been adopted by some, so I accept some of these more recent buyers may not have been properly educated on the realities, but that particular cliff edge is self-inflicted.
Secondly, based on average figures, those earlier buyers will have made about £15,000 in house price inflation since they agreed to buy, are they going to pull out over that net gain now only being £10,000, and go back into the market to pay a higher price and then SDLT anyway?
Thirdly, anecdotal stories from agents and surveys show that the holiday has been a welcome bonus for most buyers, but it wasn’t their primary motivator for moving, so they will move anyway for the reasons they chose to in the first place, and of course there is the FTBs who don’t care anyway, and I’m sure many downsizers won’t either.
One take away for future chancellors, taper the exit from these holidays over a 3-month period, and then this wont ever become a discussion point.
I agree with much that you say.
when we get to the end of March part of the problem is actually nothing to do with lawyers (though don't get me started on them) it is actually that there are not going to be enough removals firms to accommodate the volumes of last minute completions before the deadline.
trust me, from my own personal experience having just moved before Christmas, every single removals firm was booked at least 2/3/4/6 weeks in advance even just with the pre Christmas rush. The numbers of which will be dwarfed by the volume trying to complete by the end of March deadline.
Extending the stamp duty deadline would make sense but perhaps the rules should be "as long as you have exchanged contracts by the end of March, then you can have a window of up to three months to complete contracts" this overcomes multiple problems including spreading the removals work amongst other things
Yes unusual for it to be so long but actually would overcome the problem and allow the Treasury to have a legally defined date from a tax perspective (so it cant be fudged or cheated)
whilst many feel it is not possible for people agreeing sales now to exchange by end of March. I Have agreed a sale in past 16 days, will complete tomorrow...… have just agreed a sale yesterday afternoon, should be complete by Mid March..... but only possible with cash buyers and no survey and a real focus on buyers, sellers and both sides solicitors turning everything around immediately and putting pressure on their respective lawyers to get done
Anyone needing a mortgage, in a chain, needing a survey and agreeing a sale now has little if no chance whatsoever of getting it over the line before the end of the Stamp Duty deadline and we have been telling buyers in such a position (and sellers) that since early December
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