Written by guest-blogger Chris Salmon, Co-Founder of Quittance Legal Services
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.
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.
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 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’.
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.
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.
Below are some tips for sellers and buyers to help make the conveyancing process as efficient and organised as possible.
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.”
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