How to speed up your property sale before the stamp duty holiday deadline

Written by guest-blogger Chris Salmon, Co-Founder of Quittance Legal Services

The stamp duty holiday introduced by the government in 2020 to boost housing sales is due to end on 31st March 2021. Thousands of buyers may find themselves unable to take advantage of the reduced rates due to delays in the conveyancing process.

Paperwork backlogs, search delays and additional difficulties caused by the coronavirus crisis have meant that sales have been taking up to five months to complete. With the nation now plunged into a third lockdown, the situation is unlikely to ease.

Fortunately, there are still several tricks that sellers and buyers can use to help prevent some delays, minimise the effect of others, and keep their transaction moving forwards.

 

What is the stamp duty holiday?

The UK housing market ground to a halt at the start of 2020 as the coronavirus crisis took hold and the country went into lockdown.

In July 2020, Chancellor Rishi Sunak announced a temporary freeze on Stamp Duty Land Tax (SDLT) in an attempt to keep the housing market afloat. This stamp duty ‘holiday’ applies to residential properties sold for £500,000 or under in England and Northern Ireland, between 8 July 2020 and 31 March 2021 inclusive.

As buyers can save up to £15,000, the measures have, unsurprisingly, led to a huge increase in sales being agreed.

However, this upsurge in transactions has come at a time when solicitors, agents, local authorities and lenders are struggling to manage working under coronavirus restrictions and, as a result, are dealing with significant backlogs.

With less than five months to go until the stamp duty holiday ends, some buyers may find they cannot complete their purchases in time to benefit from the rate cut. Up to 325,000 property owners may fail to complete in time, according to recent estimates.

What is causing the delays?

There have been huge numbers of people wanting to take advantage of the stamp duty holiday. The sheer volume of transactions is putting pressure on property service providers who are already under significant strain from the challenges of home working. Delays can occur at every stage of the conveyancing process.

Local authority searches 

Local authority searches have been particularly hard-hit during the coronavirus crisis. Before the crisis, searches typically took around three weeks - but with huge backlogs, many authorities have now doubled their turnaround time.

Some councils are taking between 40-50 days. Others are only processing search requests if they are considered to be ‘urgent’.

Conveyancing solicitors

The pressures of home working have hit many solicitor firms hard. Home working can mean it takes longer for solicitors to access files or information, particularly if their systems are still paper-based. Many legal support staff have been furloughed, further compromising solicitors’ efficiency.

Other areas facing delays

Delays, backlogs and COVID-related challenges are also affecting lenders, surveyors and removal firms. All of these factors will have a knock-on effect for buyers or sellers.

When buying or selling a property, it usually requires around three months to complete the conveyancing process. But with the volume of transactions, coupled with the delays caused by COVID, it is currently taking around five months from offer to completion.

It is therefore possible that sales that were agreed as far back as September 2020 may not complete in time to take advantage of the stamp duty holiday. For some buyers, this could mean sales collapsing altogether if the additional stamp duty costs make the purchase financially untenable.

How can I speed up the process?

Even though the conveyancing process is currently beset with delays, there are a few things that buyers and sellers can do to make it run more smoothly. These steps can potentially buy that extra time needed to push the sale through.

Below are some tips for sellers and buyers to help make the conveyancing process as efficient and organised as possible.

 

Tips for sellers

As soon as you put your property on the market:
  • Instruct a conveyancing solicitor as soon as your home goes on the market. If you haven’t already chosen a solicitor, ask your agent who they would recommend. It’s in your joint interests to instruct a firm with a track record of getting deals through quickly.
    A solicitor will need to formally set you up as a client before they can carry out any legal work on your sale. Verifying your identity, carrying out money laundering checks and other formalities can take up to two weeks to complete. If these are completed before you find a buyer, your solicitor can start the legal work immediately after you accept an offer.
     
  • Complete the property information forms ASAP. The TA6 Property information form, the TA10 Fittings and contents form and the TA7 Leasehold information form are essential parts of the sale contract. These forms are extensive and often require you to source additional documents. If you complete the forms in advance, your solicitor can send them to the buyer’s solicitor off as soon as you accept an offer.
     
  • Locate any documents referred to in the forms (e.g. Electrical Safety Certificate or Building Insurance documents) so that you have them ready as soon as you need them. Ask your solicitor if any other paperwork may be required, and make sure you source any additional documents as soon as you can.
     
  • Ensure that your agent and solicitor have each other’s contact details as soon as your solicitor is on board. Your agent will need to send the ‘sales memo’ to your solicitor, detailing the property, buyer’s details and the agreed price. Make sure that everyone has the correct email addresses and contact numbers, and CC both the agent and solicitor into any communications.
     
  • Apply for the managing agent information pack (if you are selling a leasehold property). The information pack will be forwarded to your buyer’s solicitor and contains information about the lease, ground rent, service charges and any ongoing disputes.

Chris Salmon, Director of Quittance.co.uk says, “Sourcing managing agent information is a common cause of delay with leasehold transactions and can take weeks at the best of times. Many managing agents are simply unable to cope with the current demand, leading to serious delays.”

Once you have accepted an offer:
  • Ask your estate agent if they can email the sales memorandum to your solicitor immediately. Ask your solicitor if they can get the draft contract pack, together with your completed forms, out to the buyer’s solicitor straight away.
     
  • Ask your solicitor if they anticipate any problems or issues from the buyer’s solicitor and if they need anything from you in readiness for the buyer’s solicitor’s enquiries.

Tips for buyers

  • Get your finances sorted out first. Decide on a mortgage lender, choose a suitable mortgage product and then make sure you have an agreement in principle (AIP). Speak to both your lender and your solicitor as soon as you have identified a suitable property to get the ball rolling.
     
  • Find a solicitor that is on your chosen lender’s approved panel to avoid further delays. A buyer’s solicitor won’t be able to do as much in advance as the seller’s solicitor. However, your solicitor can still carry out the new client formalities like ID verification, helping get you off to a flying start when you find a property.
     
  • Be clear about your time frame and communicate this clearly to all parties. If you are working to a tight time frame, be clear about this from the outset, so you don’t waste any time if the seller is unwilling or unable to meet your expectations. 
     
  • Apply for local authority searches as soon as your offer is accepted. If you are obtaining a mortgage, your lender will require local authority searches to be carried out. Local authority backlogs are leading to serious delays so you should waste no time in applying for searches. If you are a cash buyer, however, you do not strictly need searches. Your solicitor will discuss the advantages and disadvantages of proceeding without searches.
     
  • Book your survey as soon as you have an offer accepted. Surveyors are currently swamped, so book early if you are having a home buyers survey. Contact a few surveyors and see who can do it the soonest. Alternatively, see if you can get your lender to carry out the mortgage valuation and the survey at the same time.

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