Transaction delays show a need for SDLT holiday extension

Calls for an extension to the stamp duty holiday deadline continue to grow louder, with good reason, although I’ve read some commentary suggesting this is only a concern for one part of the market, and that were it able ‘to get its house in order’ then the need for an extension would be greatly diminished.

There are those who consider calls for an extension to be something of a ‘cry for help’ from a conveyancing sector unable to cope with the volume of work it is currently being presented with.

But, that’s simply not the case, and the issues are much wider than that, covering pretty much all areas of the housing market, certainly in terms of current timescales and the growing delays that are exacerbating the situation.

Take, for instance, dealings with lenders – from the start of the process with some lenders taking weeks to review initial documentation from intermediaries, to post-valuation queries which can take 21 days to answer and involve up to two hours on the phone, to delays in returning mortgage redemption statements/settlement figures/getting last-minute funds, service levels are not where they might be for many.

And let’s be clear here, there are plenty of mitigating circumstances at play. Lenders have the vast majority of their staff working from home or remotely, and what might ordinarily be well-oiled machines are suffering not only because of this but also in dealing with the mortgage payment holiday. Some lenders have closed their phone lines entirely, accepting only emails; others are taking hours to get through to, and we must freely admit that it is not only conveyancing firms who are trying to contact them in order to get updates.

But the situation at many lenders is not too dissimilar from what is going on in other sectors. Many Local Authorities are taking weeks and weeks to return their local searches – we know that in over 40% of LAs, we are looking at 60 days in order to receive these back. This causes even greater issues if we have buyers not accepting the seller’s searches and applying for their own – a process which, if it is an official search or Search Code complaint, will deliver exactly the same data and protections but, more than likely, double the time it should ordinarily take to get it.

Land Registry is in a similar boat to many other housing market organisations – its customer service phone lines are only open for a limited amount of time, and conveyancers are being asked to contact HMLR via its website rather than over the phone.

Conveyancing firms are having to deal with these issues and delays, at a time when everyone is working to a specific timetable – everyone wants to complete before the end of March next year, because of course the Stamp Duty savings can be significant. And we have a situation where, for the vast majority of those looking at their purchase/sale options, they consider this to be a good time, because surely, they’ll be able to complete within four and a half months?

Ordinarily we might be able to answer ‘yes’ in good faith. But very little of 2020 has been normal – and conveyancers are trying to carry out a vastly inflated amount of work with staff members who are not in their offices and who are attempting to work ‘normally’ at home or remotely, with all the challenges this generates.

There is work-based pressure and there is what we are all currently being subjected to. Everyone wants to try and ensure that all cases complete before the deadline, but that’s not a guarantee anyone can give, which only means increased stress for all concerned because with every week closer to the end of March we will begin to see expectations grow and frustrations rise if it looks like we are behind schedule on a case. This is a snowball at the top of a hill situation.

So, what can be done? Well, the good news is that we have been working with member firms and other organisations/trade bodies, etc, to present the difficulty of the current situation to Government and to highlight just how many transactions might not complete before the deadline, what this will mean for the housing market and all stakeholders, and ultimately what damage it could do to UK plc.

We know that the Government has placed great store in the housing market to drive growth, and the fact it has allowed it to stay open during both local and national lockdowns is perhaps a sign of its importance and the work done in the Home Buying and Selling Group to create robust safe move guidance in the first lockdown. Our presentations have also been met positively and Treasury has assured us they are aware of the situation, and they are looking at the solutions we have presented.

Whether this means we will get an announcement of an extension or tapering down this side of the year (or at all) is difficult to say – possibly not. That doesn’t mean we won’t continue to make the case for this, because quite clearly, the longer time goes on, the greater chance of more transactions falling through and increased client detriment.

And let’s be clear it is not just the housing market that will suffer, it is well documented that consumer confidence which drives the wider economy is very much improved by a busy housing market. The last thing the economy therefore needs is a media storm in April about a downturn in the housing market and 300,000 transactions falling through.

We have the solutions and a Government which is listening to the data and the evidence. That, in itself, puts us in a strong position – in the meantime, we have to continue working through the process, dealing with any delays, and (importantly) managing everyone’s expectations of what is and isn’t achievable.

Written by Beth Rudolf is Director of Delivery at the Conveyancing Association (CA)