Agents and conveyancers are expressing doubt over whether a possible six week extension to the stamp duty holiday will be enough to stop fall throughs.
A government source floated the six week idea in the Daily Telegraph over the weekend - as reported on Estate Agent Today on Saturday - with a suggestion that the new cliff edge would be in mid-May instead of March 31.
However, this provoked an immediate response from Rob Hailstone, founder and managing director of the Bold Legal Group.
“It makes no sense to just extend the SDLT holiday. Another batch of would-be purchasers will simply miss the next deadline. Surely, the government either has to be creative or leave well alone at this late stage?” he commented.
“It is like saying - good news Mr Hailstone your lethal execution date has been out off six weeks. Still going to happen, still going to be just as scary and just as final. Just prolongs the agony” he continued.
And ESTAS awards founder Simon Brown wrote: “Would it not be more sensible to just extend it for those already in a transaction? Otherwise it will just extend the stress period for agents and especially conveyancers.”
The prospect of an extension that takes in some - but not all - of those buyers currently in a transaction comes as Rightmove estimates some 100,000 buyers who agreed a purchase before Christmas will fail to complete by March 31.
And the portal estimates that one in five of the buyers who agreed a purchase right back in July - seven months ago, when the stamp duty holiday was announced - will still fail to make the current March 31 cliff edge.
This is double the proportion of the previous year when only one in 10 purchases agreed in July 2019 were still waiting to complete at this time last year.
The portal says in a report out this morning: “Even if you agreed a purchase the day after the stamp duty holiday was announced, with just six weeks to go, you may still be at risk of losing out by not having enough time to meet the deadline.”
Buyer demand was ahead of the same period in 2020 throughout last month and is even stronger in all key metrics for the first week in February compared to a year ago.
Rightmove says: “Despite the very minimal chance of benefitting from the stamp duty savings, the number of purchases agreed is currently up by seven per cent. The pipeline for future sales is looking even stronger, with the number of prospective buyers sending enquiries to estate agents up by 18 per cent, and the number of visits to Rightmove up by 45 per cent. This high buyer demand is outstripping new supply and helping to edge up prices despite the challenging economic backdrop.”
Meanwhile asking prices are rising again after three successive months of falls according to Rightmove.
The average price of property coming to market has risen in the past month by 0.5 per cent - the equivalent of £1,522 - fuelled by a shortage of supply with fewer new sellers coming to market, and increased demand.
The portal says this particular surge is clearly not turbocharged by the stamp duty holiday, as it is clearly too late for new deals to meet the March 31 deadline.
Tim Bannister, the portal’s director of property data, adds: “Last year the market was unexpectedly buoyed by buyers’ determination to move and satisfy their new lockdown-induced housing needs. We may well be seeing a continuation of that this year.
“Rightmove’s early 2021 buyer data shows that despite the imminent end of the stamp duty incentive, all of the key buyer metrics are ahead of early 2020, itself an active period as the market was boosted by the post-election ‘Boris bounce’.
“As well as the current lockdown motivating buyer demand again, the restrictions have also been a factor in limiting new supply, leading to some modest upwards price pressure.
“These are strong signs that new buyer demand is not facing a cliff-edge after March 31. It remains to be seen if this momentum will be enough to make up for the removal of the stamp duty savings that are benefitting many buyers and have been adding a sense of urgency to the whole market.”
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All those in a transaction is the right way, but how you determine that? Solicitor confirmation, LA searches applied for? pre-pay £1000 of stamp - that way only real buyers would pay it?
The way to determine "those already involved in a transaction" would be those who have exchanged contracts - straightfoward - and possibly those who have sales agreed on their homes with solicitors already instructed on the transaction - not quite so straightforward.
Those with searches back and mortgage offers issued
People could exchange conditionally Richard, conditional on mortgage, conditional on a planning document appearing, all sorts of possible loopholes could be exploited.
Do NOT extend deadline and let’s start moving forward.....enough of the excuses.....
so removals aren't an issue in your area?
Fortunately the vast bulk of my sales racing to meet the deadline have gone through and many of the remainder are on track - However, whilst solicitors are an issue the lack of enough removals companies to meet the deadline if all the last minute sales go through will mean that many sales would be physically ready to exchange and complete but cant complete because buyers and sellers wont be able to obtain a removals slot in time and then cant agree a completion date this side of the wire.
Its not excuses (unless you don't understand the logistics involved) so a delay to allow sellers to exchange before the deadline and delay completion till after the deadline will help a lot more of those sales in the pipeline go through, through no fault of themselves, their lawyers (but just cant get a removals slot)
What is needed is the Regulation of Estate Agents. It should have happed years ago. With professional obligations putting some teeth behind them and enforcing better standards then an extension could have been accommodated without cheating. By the way, Yes - I am saying there has been some disgraceful conduct by some Agents, so desperate are they not to lose the Sale.
I for one would welcome regulation (though it hasn't helped much in the legal profession as far as speed and competence are concerned, lying to buyers and sellers about what work they have actually done or not - sorry we catch a lot out at the minute - its a broad statement but then again yours even more so) as would most decent agents i know and have worked with for over 36 years (though that has little or nothing to do with the present cliff edge that most sellers and buyers now find themselves with).
All of our buyers and sellers knew back in early December than any new sales were now going to be tough to get over the line, it hinged on multiple factors (not only searches/mortgages and surveyors) but particularly the lawyers involved (those good ones have still been getting them across the line - I managed one recently from sale agreed to move in 12 days)
The real reason an extension is needed (but obviously passed you by) is the fact that even with the best agents, best lawyers and bests systems in place.... there are not going to be enough removals companies able to give firm dates this side of the deadline. (I.e. if you are ready to exchange in early March well in time for the deadline, you may not be able to get a removal company to deliver before the end date)
I.e. - extend the deadline for completions (anyone who exchanges before end of March gets stamp duty relief but has an extra grace period to complete so they can book removals and spread the pain that end)
Ha ha. I don’t follow the bit about ‘catching out’ solicitors! A conveyancer should not tell an agent absolutely anything about what work has been done, or not done - firstly because it’s nothing to do with the agent but also because the agent will change or mis-state or not grasp what has been said.
Further, criticisms on speed usually come from those who do not understand the process and the onerous obligations which fall upon the Professionals. Add to that the fact that conveyancers have to work on 3, 4, 5 files just to get anywhere near the agent’s fee ££££ for just one!
Anyway, returning to the topic, I’d rather see the ‘holiday’ end and let the market readjust, coinciding with the end of ‘lockdown’. That said, an extension for cases actually underway at 31 March might be feasible but ONLY if the responsibility for some form of certification for SDLT purposes lies strictly on the shoulders of BOTH the regulated law firms acting in the transaction.
I agree to allow any exchanges before the end of March with an agreed completion to be able to take advantage of the exemption
We have more Vendors coming to us via Google asking how they can speed up transactions and become better prepared than we have agents asking the same. Some clients are now emailing their agents asking why they were not offered our services months ago...which I'll bet is embarrassing.
Agents need to pay attention and get more involved as the market is demanding better and leading the way.
We have been imploring agents for months to be aware of the car crash that is coming and, in effect, giving seat belts and airbags away to reduce the impact, but only a few agents have actually taken it seriously.
Deadlines always exists and not all can be negotiated away. To better prepare your market to start hitting deadlines has to be the way forward. IF sales are better packaged, conveyancers can work smarter and get more cases through in a shorter period of time to warrant how much they are getting paid per file. Engage with getting people legally prepared and adopt digital technology to store documents that are pertinent to the sale.
The Property Industry needs to aspire to become a property profession. We still engage with too many agents and influencers who see the value in what we offer but choose to do little or nothing about it.
Thankfully our model is set up to engage directly with home movers themselves but this leads to them feeling let down by their agent.
We are a massively pro agent business and it simply saddens us to hear home movers being let down by not being offered every tool available to them to hit deadlines, not just the SDLT cliff edge.
How would Licensed Conveyancers conduct business without us honest reputable Estate Agents helping them every step of the way.....???
Firstly, unsure why “Licensed Conveyancers” are specifically mentioned here. The term describes a CLC regulated qualified person/firm who does exactly the same job as a SRA regulated Solicitor in the Conveyancing Process. The difference is that the Solicitor might not be a specialist in property matters.
Next: a Conveyancer (whether LC or Solicitor) does not need any “help” from an Agent except the memo of sale and perhaps a little assistance helping the Buyer & Seller reach agreement on a completion date; as Agents can very usefully speak direct to all parties….whereas the lawyer cannot. Lawyers do NOT need incessant calls from agents as month end nears, asking…”has it exchanged yet?”
The current buyers and sellers where a sale has been agreed should be allowed to proceed protected against a hold up stalling their completion. This extension is necessary due to delays caused by Covid, solicitor delays, survey delays and searches taking up to 2 months to come back. It seems crazy to penalise the buyer for Covid related delays outside their control.
Its simple to put in place a rule that, only cases where the sale has been agreed, solicitors have been instructed and searches have been requested get an extension. Resulting in a controlled, regulated and fair end to the stamp duty holiday. The alternative is a lottery, upset across the market and the risk of sales falling through. Chaos or calm the government get to decide.
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