Stamp Duty Holiday: A True Test For Conveyancers
In recent weeks, the volume of enquiries has been unprecedented. The residential property team are prioritising our existing clients and recommendations and trying to keep a sense of realism on how much work we can do.
Clients are struggling to secure properties to buy and gazumping is rife. This raises a series of questions: firstly, if prices are increasing, is there a saving to be made with the stamp duty holiday? A follow-up question is then raised – was a stamp duty holiday a necessary measure? Personally, I do not believe so as the market bounced back when moving restrictions were lifted in May and therefore, I do not see the point of a temporary holiday. It would have been wiser to simply increase the threshold to £300,000.
Expectations have become unrealistic and some estate agents are setting unlikely time frames for exchange and completion, often without consultation with the parties.
It is a challenging time to be a conveyancing lawyer but we are encouraged that there are more enquiries from people before marketing or when looking for a property to purchase. This is a shift in mind set as historically, conveyancers would be contacted when a deal is concluded. We are encouraging agents to advise buyers and sellers to nominate their conveyancer at the outset. I have been assisting buyers recently in checking the title or planning history before they make an offer. There have been instances where the clients decided not to make an offer and not waste time or money. Similarly, clients about to market their property have been asked whether they have the relevant planning and building control documents and to ensure their paperwork is in order before a sale is agreed. Early guidance results in less abortive transactions and a quicker timeframe between exchange and completion.
More clients are anxious at the moment on how the COVID-19 pandemic could delay their sale or purchase and as a result, they want to set timeframes for exchange and completion at the outset. When COVID clauses have been discussed with clients, they often prefer to take their chances rather than a watered down contract enabling parties to change the completion date. Removal companies are insisting on fixed removal dates and once booked, the fee is payable which could result in the moving date becoming more expensive.
It is disappointing that we are not given a true picture of how long the chain is and the position of each party. On a recent transaction, I was acting for the buyer at the bottom of the chain and the sellers’ solicitor was insisting that we had to exchange by mid-July with completion by the end of July. My clients were told that their seller was moving to a property owned and no onward chain. My clients agreed to meet these timeframes and I worked quickly to achieve their aim. I released the contract twice in mid-July and nothing happened. I contacted the estate agent and after some investigation, he informed me that there was a party in the chain who had agreed a private sale and they were not ready. At the time of writing this article on 24 August 2020, exchange has still not taken place. There is something wrong with a system that relies on everyone in the chain to be ready and beholden to third parties to buy or sell property.
It is disappointing that the conveyancing process, which is high risk and low reward, is not understood. I have been speaking to a lot of frustrated solicitors and licenced conveyancers recently and we need to work together to improve the process and make it more efficient. Fees should increase to reflect a professional service is being provided and to take into account the rising cost of indemnity insurance. At Grant Saw, conveyancing is undertaken by qualified lawyers. I can see that in time, there will be very few solicitors who would want to be a conveyancing solicitor. Why spend time and money on an education and qualify as a solicitor to provide conveyancing services when there are a lot of unqualified people in the conveyancing industry? Will firms’ want more qualified and experienced lawyers as they will need less training and supervision?
Juggling the work and managing expectations is a pre-requisite. Being a conveyancing lawyer is not easy. It takes years of training, experience and determination to want to provide a quality service. The reward is repeat business, recommendations and clients who value your professional qualification.
The Chancellor introduced some good schemes to help the economy but the Stamp Duty Holiday is not one of them. There will be landlords who may have wanted to sell residential property during this period but may not be able to do so because of the moratorium on evictions.
At the moment, it feels like a countdown to 31 March 2021 and subsequent further uncertainty beyond that date.