Today’s Conveyancer approached one of the largest specialist legal conveyancing companies in the UK to ask about their experiences of the Stamp Duty Land Tax (SDLT) holiday and their view on the approach the government should take.
Lloyd Davies, founder and Managing Director of residential conveyancing specialists Property Transaction who believes the current SDLT holiday was not necessary and it would be a ‘sensible approach’ for the Government to extend the SDLT holiday. He said:
“The majority of the conveyancers I have spoken to, which represents a cross-section of large and small, high street and online conveyancers, are all reporting record numbers of instructions since the start of July. The general consensus is that conveyancers are 130 – 150% overcapacity, which will lead to significant service and delivery issues later this year, leading into Christmas and definitely leading into the SDLT deadline of 31st March 2021.
“Most Conveyancers are actively recruiting – from the same pool of professionals – with little movement at the moment, as Conveyancers are contemplating jumping ship at these uncertain times – unconvinced that the grass will be greener elsewhere. The deciding factor will be the amount of work and capacity – number of transactions – and the support they will receive at any new legal practice, as much as financial packages.
“The government will need to extend the SDLT holiday and I would propose for at least a further 12 months. The UK economy is dependent on a healthy property market, with residential property prices increasing. When property prices decrease, we go into recession, which the government will want to avoid at all costs this spring. With demand oversupply, as with our current situation, house prices will continue to increase gradually into the new year if the SDLT holiday is extended. To end the SDLT holiday in March will lead to a huge number of clients not being able to take advantage of the holiday – with conveyancers, search providers, local authorities and mortgage lenders not being able to meet the increased artificial completion demand and deadline.
“The virus is not going anywhere for some time and the government need to look longer term, both in terms of protecting businesses and individuals with furlough and similar schemes. Brexit is looming and the UK government will not want the economy to falter. At the moment there appears to be an exodus out of the cities and into the country and coastal areas, with individuals realising the benefit of the IT revolution that has come about as a result of Covid19 and their ability to work from home for the most part.
“I do not believe that we needed an SDLT holiday when it was announced, with backed-up transactions and instructions we did not need to experience further volume and disruption. The sensible approach for the government will be to prolong the SDLT holiday – indefinitely if possible – to allow property prices to increase gradually and to avoid the boom and bust situation that appears imminent in the spring as things stand.”