The rumoured three-month stamp duty holiday extension may not provide enough time for many of the existing residential property deals to be completed.
The chancellor Rishi Sunak is said to be considering a limited extension through to the end of June to prevent thousands of homes sales from falling through., according to the Times.
The Telegraph last week reported that mid-May would be the cut off point for any potential extension.
However, this plan for a short extension to Stamp Duty is simply not enough and will only “kick the can down the road”, according to Adrian Jaggard, the CEO of Taylor Rose MW.
The head of the legal conveyancing firm warns that extending the deadline by just a few weeks would “fail to avert a catastrophe within the housing market”.
Jaggard, like most people, would like to see Sunak announce an extension to the scheme in next month’s budget, but this needs to take into consideration the challenges the industry has faced amid greater demand from buyers and the lockdown.
There are now just six weeks until the official 31 March deadline and it is estimated some 91,471 home sales — one in five of the 457,358 sold subject to contract at the end of last year — are expected to fall through unless the chancellor takes action.
Jaggard said the current volume of transactions has left the sector at breaking point.
He commented: “Like most sectors, legal services have had a very tough year adapting to extreme fluctuations in demand.
“Social restrictions and lockdowns place added pressure on conveyancers that are struggling to manage short-notice home-working and childcare challenges. Right now, there is an unprecedented volume of transactions in the system, at a time when conveyancers and the many associated industries have been largely stripped of their support structure.
“Pressure is accelerating as clients contemplate missing the SDLT deadline and scramble to get their deal over the line to avoid increased cost or possibly a collapsed deal. Call volumes and demands are increasing by the day, reason is evaporating and threats are starting to be made.
“If demand for conveyancing services drops after the SDLT holiday deadline expires as speculated, then the impact on high street firms that provide an important social function could be catastrophic.”
Jaggard said his company is currently racing to help 20,000 prospective buyers complete deals. That is double the amount of people they were supporting in March last year. He therefore believes more is needed than an extension to relieve the pressure.
He added: “Whilst an extension of the SDLT feels like the only workable solution to the immense pressure on the property market, we fear that a straightforward extension will simply kick the can down the road.
“Pressure could be reduced at a controlled rate by a tapered end to an extended SDLT holiday period, or ideally a wholesale review of the SDLT to encourage steady transaction numbers over the next critical phase of economic recovery.”
“It is important for the conveyancing sector and broader property market that demand fluctuations are flattened and that transaction numbers are maintained at healthy levels. For serviceable demand to continue, we believe that wholesale review of the SDLT structure over a longer period should provide the necessary visibility and stability.”
Comments (17)
With individual conveyancers topping £300k+ gross fees for the last 12 months they need a break, not a can kicking 3 months extension to excuse the slow conveyancers who have kept their clients waiting/will not make the deadline. Do I know of any waiting clients expecting to but not able to secure 1 April – no, not on our watch.
But tapering extension is more likely as this story is a government leak for feedback, so prepare for the fine print, not a blanket three months extension.
It is hard to imagine how this can be implemented without some form of tapering (e.g. by date of Memo of Sale) or it would be a really illogical ‘snooze’ of a problem by 3 months. But equally how on earth can anyone police the date of the Memo of Sale! We wait with baited breath!
Whilst not a great fan of many solicitors the good ones are genuinely at capacity and to distort the market and overload them any further is frankly cretinous. A grace period for all those sales that have reached certain legal stages eg enquiries is what is needed and not a blanket extension.
I think you should all accept whatever comes and make hay while the chancellor shines down on you, warn buyers that they may not make the new deadline and your job is done except to NOT factor into your cash flow projections for Q3/4 all new transactions, just yet.
I think we are all coming at this the wrong way
Moving the date only brings us back from the edge for short period
The simplest way would be to allow buyers who agree a purchase BEFORE 31/3 to continue and take the benefit of the “holiday” until the sale is completed. That relieves this “sword of damocles”
All that needs to brought into place is a mechanism where the buyers produce a copy of the estate agents dated sales memo/head of terms or what ever you call it along with a confirmation form the vendors lawyers that this was received on a specific date (before 31/3) and ideally even a “connecting email” to the buyers lawyer to confirm instructions (as they do now) and, ideally a contract issued
That can all be traced to specific date (Say like a sale I agreed last week and where lawyers have been in touch)
If they accept this slight tweak it resolves this issue
I can hear all the doubters (maybe some lawyers I have also spoken too) say its open to mis use
How? Either the agent, the buyer, the seller and both lawyers have to be “in cahoots” or someone is setting up a transaction (again with the sellers lawyer in agreement) to buy a property they are not intending to buy.
Sorry I cant see any reasons why this would not work
I know the media and politicians don’t trust estate agents, but why not the lawyers (who have little or nothing to gain)
#schimples
End of chain stock is the problem. unless House builders build more vacant homes for people to move into, more people leave estate properties that don’t get rented out by the beneficiaries, more people emigrate or a load of people decide to sell their short let spare properties, there is a shortage of properties that will frustratingly move with the stamp duty extension.
They created an artificial demand without creating the supply to match it.
erm… Hello Robert, please excuse my ignorance… but there is a massive shortage of rental properties too… please don’t suggest that owners should be selling up their short let spare properties as well.
What we need is more property available all around for both sale and to let (though I do appreciate your post relates to the Stamp exemption).
Our problem in our local area is that many are choosing not to list their home For Sale because they cannot see anything they want to buy available online. So I tend to spend my days trying to assure potential vendors that if everyone that wanted to move would just actually list their property, there would be enough to go around and satisfy buyer demand(well locally anyway).
The frustrating thing is we are busier than ever, have already had our most successful February in our 20 years of trading and could be busier still if there was just a few more homes on the market.
So in short, I do sort of agree with you – just don’t take my rental properties too please! 🙂
rental properties are end of chain too but people won’t move out unless there is somewhere for them to go. AST rentals aren’t the ones I am talking about.
Low interest rates mean people moving in together now don’t have to sell a property, they keep hold of it and rent it out for weekday business lets or weekend city breaks. A vast stock of property that ought to be providing long term accommodation either as AST or sale is oustide the available supply of homes
Thank you Sir. I Understand now.
I’m in complete agreement, but it can’t be easy being the only link in the sales process not having to leave the comfort and safety of your home office.
What were conveyancers doing between April and July last year? Hmmm very little. 2020 saw the lowest number of completions in the past 6 years.
All we hear about is few months of heavy business where they still have not managed to hit the monthly total of 156 000 completions achieved in March 2016 when the last stamp duty holiday ended.
It’s funny, but there are no headlines that agents are crumbling under the weight of increased sales; far from it, they are delighted. Not spoken to one surveyor yet who has moaned that business is too much after many believed the property market would been its knees in 2020.
They are equally delighted to be earning more than the expected.
Perhaps instead of tapering the holiday, we should ask Agents if they could base their sales around Conveyancers desired workload. After all, without agents how much work would Conveyancers actually have ?
Admittedly, unlike Conveyancing, agents, surveyors and removal companies were all impervious to the Covid restrictions.
I note Mr Jaggard that there are no complaints of excessive workload from your billing department.
What were conveyancers doing between April and July last year..? Working damn hard! With all support staff furloughed our fee earners worked hard to get deals lined up for when moving was allowed again. This relaxation happened mid-May and opened up the flood gates for completions. Completions that involved no-one actually moving continued since lockdown as usual.
I suspect Mythoughts has no knowledge of the workings of conveyancing firms.
Transaction levels as we went into the pandemic were high and since June there has been an increase in instructions in the region of 20-25% above those levels.
Staff are working long hours, and seven days a week in most cases, to keep up the service levels of an ever demanding public, many of which seem to be oblivious to the impact that working from home has on what is often a team based approach to working.
Whilst, business proprietors will be enjoying an increase in income this does not mean that such benefits are passed on to the hard working conveyancing staff.
Looking at the Government figures of completed sales for that period, April & May were the two lowest months of completed sales on record. Less than half an average month for April & May.
Your response is comparing workload versus resources. If you were so busy getting “Deals Lined up” why would staff be furloughted knowing deals were coming ?
It wasn’t until October that completed transactions levels were up year on year.
Legal futures 05 June 20 – Taylor Rose TTKW is set to pay £1.4m to buy McMillan Williams (MW), which was sunk by slowdowns in both the property market and personal injury settlements, and its high level of gearing, it has emerged.
I don’t mind snide comments that I have no knowledge of conveyancing firms but perhaps before you respond, it might help if you were conversant with the figures that clearly show by September there were only round 60% completed sales based upon the figures 2019
Its not Agents responsible for these figures… It’s Conveyancers.
Let’s break this down a little:
What were conveyancers doing between April and July last year? – During most of this period offices were closed due to the government enforced lockdown. The majority of Conveyancing is now carried out as an office based team process involving a number of individual participants. These individuals were dispersed to their homes, breaking that process. Put simply, conveyancers had to reinvent how they worked.
let’s also not forget that the lockdown impacted on the entire supply chain, from searches to estate agents who also furloughed staff. And of course vendors and purchasers, cautious about an uncertain future.
2020 saw the lowest number of completions in the past 6 years – Completions were down circa 50% during Q2 2020, the first lockdown period. Much of this pipeline was taken in to and completed in Q3. Q4 represents the first completions from sales agreed post the first lockdown, during which there was another lockdown. Sales from Q3 & Q4 2020 will in the main complete in Q1 & Q2 2021.
Still have not managed to hit the monthly total of 156 000 completions achieved in March 2016 when the last stamp duty holiday ended – There are in fact less solicitors carrying out conveyancing and conveyancers operating today than there were 5 years ago, the capacity simply isn’t there any more. Why? Because fee levels and fixed costs such as PI insurance have reached a point where for many, the business is no longer viable.
It’s funny, but there are no headlines that agents are crumbling under the weight of increased sales – Simply a combination of less efficient process during the lockdown periods, generally reduced capacity across the board plus a 20% increase in transactions. Whilst agency has dealt admirably with the last item, it hasn’t had to confront the first two.
Perhaps instead of tapering the holiday, we should ask Agents if they could base their sales around Conveyancers desired workload? – Would it be prudent to understand the capacity and timescales that the conveyancer you work has available during these testing times of a globe pandemic? Yes, I think it would be. Then chose if these timescales suit you or seek an alternative supplier with timescales that do.
After all, without agents how much work would Conveyancers actually have – I’m thinking Chicken and egg. Without all of the parties involved in a transaction, the transaction simply won’t happen. No party is more or less important than the other if the ultimate goal is to complete.
And for disclosure, I’m not nor ever have been a conveyancer
By trying to defend the position you have pretty much confirmed my point. For whatever reasons, offices closed etc, the workload was light. Re-inventing the way we work was not unique to Conveyancing.
The fact there are less conveyancers I accept does not help the situation and which conveyancer to use is a matter for the consumer.
With regard to Q1 in 2016, there were around 451,000 completed sales versus 350,000 in Q4 of 2020. Notwithstanding, recent numbers, still way short.
The completed house sale figures for Q1 2021 will reveal all but not a good start when January’s figures are less than Decembers.
With regard to the timescales, perhaps you might wish to consider the time it takes an agent from the marketing to secure an instruction to the time it reaches a point where we handover the keys. Far more hours than you might imagine. Agents manage to accomplish this series of tasks without complaint in the busiest of times.
Just as an aside, much of the day is spent answering queries from buyers and sellers making enquiry of the process of their sale which should be directed at the Solicitor/Conveyancer but agents do not sit with a billing sheet pinned to their desk.
It is the Chicken and the Egg but it is the egg that is complaining. Without the Chicken….
Let us not forget, if sales fall through who get affected most.. the Agent. No fee but all the expense.
Solicitors/Conveyancers still send the bill.
Ironic that Unemployment is on the rise, masked by Furlough yet Conveyancers are complaining of too much work and having to work to a deadline.
Mythoughts – you can’t believe what you type, so it makes it a little pointless even contributing.
Indeed, what are you actually talking about – April to July last year – while far too many estate agents shut up shops, all conveyancers remained in business and kept all deals moving from Memo to completion. It was relentless, and all from home!?
And right now, where conveyancers are working all hours to get more people through by 1 April than their resources normally permit, we have to face dozens of emails a week on top of our 100+ a day we get, asking for wretched updates with zero offer of assistance. Naturally, we delete them, we have to, just to keep up with keeping the UK moving.
Work better as a Team and help conveyancers after issuing your Memo – the very best agents do just that.
“Work better as a Team and help conveyancers after issuing your Memo – the very best agents do just that”
The very best of conveyancers don’t have the attitude ” we have to face dozens of emails a week on top of our 100+ a day we get, asking for wretched updates with zero offer of assistance. Naturally, we delete them”
How many emails do you think Agents receive each week. especially those Agents that work for a Corporate?
April to July last year – while far too many estate agents shut up shops, all conveyancers remained in business and kept all deals moving from Memo to completion. It was relentless, – I don’t compile the figures, like everyone else I read them.
Possibly you need to get out more…you’ve developed a Trench mentality and become delusional.