Lloyd Davies, Managing Director of Property Transaction sets realistic expectations with customers in regards to the Stamp Duty Tax Holiday while working with key industry stakeholders to put pressure on the Government to extend the Stamp Duty deadline.
Today’s Conveyancer Reports:
With less than 20 weeks to go until the end of the Stamp Duty Land Tax (SDLT) holiday, and with the run-up to Christmas holiday season slowing transactions down, conveyancers are faced with disruptions in the process and managing clients’ expectations.
Recently, Gavin Brazag, founder of The Advisory, a property consultancy firm, believes around 30% of buyers are going to be unable to complete in time to make the most of the holiday. He said:
“Because it takes roughly 21 weeks for house sales in hot markets to find a buyer, accept an offer and complete the legal process, only house sellers that are already on the market – or lucky enough to be in an area where houses are likely to sell fast – will be able to secure a buyer and get their deal over the line before the deadline.
“Everyone else will no doubt face last minute chain collapses as buyers pull out of the deal or try to renegotiate their purchase price downwards.”
At the end of last month, the property industry wrote an open letter to Chancellor Rishi Sunak, imploring him to extend the holiday to help the property market which was previously stifled due to the first UK national lockdown at the beginning of March 2020.
With conveyancers already enduring an unprecedented busy time and the tricky situation of managing client expectations as the deadline looms closer, Today’s Conveyancer asked experts in the industry if they were setting expectations for their clients and asked what they have been telling them in terms of the SDLT deadline.
Pam Sams, partner at Dutton Gregory Solicitors comments. He said:
“We are finding certain Estate Agents in particular talking up the end of the SDLT holiday saying they have to do everything urgently now. We are still several months away from the same coming to an end. Clients always ask how quick can things be done and I always say my record from start to finish is 6 hours but longest was 30 months. Both had very specific facts attached to them as like every human being or creature on this planet each transaction is unique.
A clam head in these turbulent times is needed. Explaining to clients that if they can get their seller or buyer to be ready and have their funds in place everything should go as smoothly as it can. There is no point causing more hysteria than already exists in the market place.
A number of firms I have spoken to recently are refusing to take on new work which results in those who are, such as mine having to price services accordingly to the market in which we are in. Those firms refusing work are unlikely to be remembered favourably by introducers when they need work, and believe as sure as night follows day there will be a day when they need work.
“Explaining to clients that if they want to purchase not to wait with returning their instructions and ID is key. The number of people who still want to wait until their mortgage offer is issued never ceases to amaze me. It causes delay and they get frustrated as generally they cannot see they have caused the same. Keep calm and carry on conveyancing is the only way.”
John Jones, head of conveyancing at BBH Legal Services Limited further comments. He said:
“I attach our COVID19 Transaction Statement. That Statement and below are the messages we are giving to our clients:
“We draw your attention to our ‘BBH COVID19 Transaction Statement’ dated 1st September 2020. In that Statement we make it clear that Transactions are taking longer than normal. This is due to matters outside the control of BBH and directly linked to the impact COVID19 is having on the property market. As a result BBH is unable to guarantee a specific timescale or meet a specific deadline in relation to individual transactions.
In particular, there is no guarantee that a desired completion date required by you either before Christmas 2020 or before the expiry of the SDLT ‘holiday’ (31st March 2021) can be achieved. BBH will work with you to achieve a successful outcome for your transaction but we ask that you plan appropriately, given the nature of the market at present, and be pragmatic about the date you wish to complete upon. BBH will inform you whether your desired completion date is realistic or not.”
Sarah Dwight, conveyancing solicitor also commented, she said:
“Managing clients’ expectations is vital and whereas I would ordinarily be asking them at this time of year whether they wanted to move before Christmas, I am now asking if they are thinking of moving by the 31st March. It sounds ludicrous – but it is important to be sure that the clients understand that there is no magic wand which enables them to move quickly and we are dependent on so many things which are outside of our control. Searches, mortgage offers, chains….. making sure that the client will still want to move if they have to pay the stamp duty is imperative as is making sure that they can afford to move if they have to pay the stamp duty.”
Lloyd Davies, Conveyancing Association Director and Managing Director of Property Transaction sets realistic expectations with customers in regards to SDLT, while working with key industry stakeholders to put pressure on the Government to extend the Stamp Duty deadline. The email reads:
“We would like to reassure all our clients that in line with the latest government announcements, moving house in Wales or England is still allowed under the government guidelines – which state that you can move house if it is necessary and safe for you to do so. Industry guidance on how to move home safely can be found here. Thank you for your patience during this unprecedented time. Download the Safe Home Moving Guide here.
Additional information on the Welsh lockdown can be found here.
Additional information on the Covid restrictions in place in your area can be found here.
We aim to provide business as usual for all clients, with our team either working from home or in the office. Our offices remain closed to the general public at this time.
Please note that conveyancing timelines have increased across the industry due to the previous lockdown provisions and the resulting backlog of transactions, as well as the significant increase in the volume of transactions. Many property stakeholders, such as Search providers and Mortgage Lenders, as well as Conveyancers, are struggling with the number of transactions they are having to deal with at this time. As a result this may increase your transaction timelines, however we will do our utmost to process your transaction as quickly as possible. Please be patient if we need to manage third party situations which are out of our immediate control.
Many of our clients will be looking to move house before Christmas this year. Our dedicated team will do our utmost to help you move to your transaction deadlines. We will be projecting which transactions will complete in time for Christmas at the start of November. Our priority will be to move families and clients into their new homes ready for the festive season.
Stamp Duty Holiday
You will be aware that the Stamp Duty holiday comes to an end on the 31st March 2021. While we will endeavour to complete all required transactions before the deadline, we cannot provide any guarantees as to completion timelines. We are currently working with key industry stakeholders to put pressure on the Government to extend the Stamp Duty deadline.
Thank you for your support and patience during these difficult times.”
Nicola Lebish, Senior Associate and Head of Enfranchisement in the residential department at Birketts LLP further added:
“Along with other residential property practices, we have seen a remarkable increase in instructions since the end of the first lockdown and the Government announced the SDLT holiday.
“Birketts is open over the Christmas period; however, the majority of conveyancing firms will close, as will some search providers and local authorities, and with HMRC and HMLR running at reduced capacity, Christmas is (as ever) likely to be a time when conveyancing transactions cannot be progressed in a meaningful way.
“Across the department we have worked extremely hard to meet our clients’ timescales for completion. With the average transaction taking 16 weeks (and some taking as long as 20 weeks), delays with some local authority searches, delays with valuations for mortgages and with the Christmas season fast approaching, we are now informing clients with new instructions that we may not achieve completion by 31 March 2021. We will, as always, do our utmost to meet our clients’ timescales.
A spokesperson for Jackson Lees talked about how they were setting expectations, they added:
“When the SDLT holiday was announced we made appropriate amendments to our welcome team where fully briefed and our welcome letter to all clients to advise of the provisions, length and limitation of the stamp duty holiday to ensure they had all information available to them.
It is our plan to renew and reaffirm this advice in the new year for any ongoing cases at that time to ensure that we do not fall foul of clients expectations if the current holiday is not extended. This communication is likely to be by way of email to all buyer clients and an updated footer to our emails. Any new cases taken in the new year will be strongly advised that we cannot give any assurances in relation to them being able to complete within the requisite time in order to benefit from the stamp duty holiday”
Jackson Lees have also advised their clients by adding:
“We have been advising them of the scheme and confirming whether they are eligible or not but with the caveat that under the current scheme the transaction must be completed by 31 March 2021.”
Mitesh Lala, residential property solicitor at Higgs & Sons Solicitors said:
“Whatever their circumstances or intentions, managing clients’ expectations underpins our role as conveyancers, but the stamp duty holiday has certainly added a layer of difficulty given the uncertain times we are living in.
“Any transaction can become prone to uncontrollable external factors, but as lawyers we consider it important to ensure that the client is advised of what circumstances might likely prolong the matters. We now make it clear that achieving completion within the stamp duty holiday period is not guaranteed. We would suggest the following may well have an impact:
“The covid-19 pandemic: any changes in the government’s guidelines, whether directly (instructions relating to the property market) or indirectly (guidance relating to health which have a knock-on effect e.g. for clients who might be required to self-isolate) could delay completion past the 31 March “deadline”, with no obvious recourse.
“Lack of responsiveness from sellers, buyers on related sales, search providers, local authorities providing searches, mortgage lenders, surveyors etc – they all play a part in the process but can add to unforeseen delays.
“Changes in bank’s lending criteria due to the pandemic
“Changes in the sellers’/buyers’ circumstances (unemployment/furlough/impact on borrowing) leading to them withdrawing at short notice.
“Clearly, considering the risks, there is every chance a purchase might collapse or be delayed through no fault of the buyer client or their legal representatives. It is important that clients are being advised of this at the outset and are budgeting and prepared for a situation where completion does not take place before 31 March 2021 so to qualify. However, like many other schemes rolled out by the Government, there is a strong chance it will be extended to further stimulate the economy but that should not be relied up. We will watch with interest.”