CA ask government to look at SDLT holiday extension
Lloyd Davies is Operations Director at the Conveyancing Association (CA) has shared his views with Today’s Conveyancer about what he feels needs to be done to address the stamp duty and tax (SDLT) holiday.
Few of us will not have welcomed the boost to activity we have seen since the end of the last lockdown in July, and looking ahead those levels of new instructions look likely to be maintained certainly up until the current end date of the stamp duty holiday on the 31st March next year.
In any ‘normal’ period these next five or so months would be challenging but in this year, and moving into 2021, the challenges are even greater. With local/national lockdowns still taking place, the vast majority of staff working remotely/from home, and of course, the increased demand and work we are seeing as a result of the earlier lockdown this year, as well as the incentives that the stamp duty holiday brings.
We are of course grateful for this activity boost, but we are reaching a tipping point where current ‘run rates’ indicate a large number of purchasers are not going to be able to benefit from the stamp duty holiday because of the increased amount of time it is taking to get through to exchange.
TwentyCI recently suggested that the ‘time it takes to buy a house is expected to lengthen to over five months from sales agreed to exchange of contracts’ while L&G recently argued that those planning to purchase should begin their homebuying ‘journey’ by the 1 November in order to benefit from the stamp duty holiday. Given our own work rates, we would suggest even that appears optimistic and I am conscious that, by the time you read this, we will be just days away from this date.
Therefore, given those timelines, the deadline date, and our sector’s activity levels, we believe the time for action is now, and we would like to see the Government relook at the stamp duty holiday deadline and reassess whether an extension, preferably in the region of six to 12 months, or a tapered end to relief can be delivered in order to ensure that – during these unprecedented times – we can better manage the current workload to meet demand and we can ensure that no-one who wishes to purchase during this time misses out on the savings available.
I think we’re all conscious within the conveyancing (and wider housing) sector that this might be perceived as a u-turn by the Government, or that this is simply the housing market asking for more bread for its table without paying up for it.
We all recognise the benefits an extension would bring in terms of relieving some of the pressure currently being brought to bear on all market practitioners, but there (in our view) also has to be a focus on the long-term benefits that might also be worked on during this period, particularly in terms of bringing down the numbers of aborted transactions and getting a much more efficient and timely purchase process.
To that end, any decision to taper down the stamp duty extension might well be delivered on the proviso that the industry ‘gets its house in order’ and that we fulfil the Government brief to get a more efficient/transparent/less costly house purchase process.
I don’t think any of us active in, or serious about, the conveyancing sector would begrudge this – indeed, it is what the Conveyancing Association has been campaigning for over the past decade.
So, if we were to offer that as part of any Government decision to extend/taper the stamp duty holiday period we would seek to deliver, for example, on the provision of better upfront information, or that stakeholders met the conditions of the Consumer Protection from Unfair Trading Regulations (CPRs), then I think this could deliver benefits for all. There are clearly other areas of improvement that we might also wish to see enacted, for example, the potential for property log books and of course the ability to deliver in the area of digital ID.
The point is that any decision to extend/taper the holiday should come with a focus on improving the whole process and ensuring in the future that we get the vast majority of cases through to completion, and that (as currently) 25% are not aborted with all the costs that incurs.
Many industry trade bodies, organisations and firms themselves would be fully behind such an approach and the Government might well find this extension/taper can act as a significant catalyst to get those improvements we all want to see. However, we need to work out the details of this soon if we are to ensure that this is not an opportunity lost – we at the CA are fully willing and able to lend our support and to work with all others to get us all to the solution we believe we increasingly need. The time to act is now.