Is the new stamp duty deadline enough to get to completion?

The three-month stamp duty holiday extension that was heavily trailed before the Budget announcement was confirmed, but with a somewhat surprising three-month taper built in where completions between July and the end of September will have a nil rate up to £250k, instead of £500k. After that, we return to the pre-July 2020 ‘normal’.

You can understand why the Government have opted for this approach, and clearly industry lobbying, and we are led to believe, the stamp duty petition, played a significant role in the taper decision.

The extra three months will allow a significant number of transactions already in the pipeline to complete, and there is no doubting that for the conveyancers working on those cases, this will come as something of a relief.

A big part of this – and one that should not be forgotten – is the incredible amount of work that conveyancers have been achieving throughout the last six months. Search Acumen figures for December last year, show that the number of property transactions increased by 27% in just one month.

In numbers that was close to a 16,000 month-on-month increase; overall Q4 registered just shy of 23,000 extra transactions, compared to Q3 last year. This, at a time, when pretty much every single conveyancing member of staff is working from home or remotely, and where they are under extreme pressure in order to meet the stamp duty deadline.

If you look clinically at this, the Government has undoubtedly gone its own way here. Most of the industry, myself included, would have much preferred a decision based on those already in the pipeline; allowing them a grace period beyond the 31st of March to complete would have been fair.

Now, the Government would argue no doubt that this is what they have provided; that three months extra should be enough to get all those within the process through to completion so they can benefit from a saving, lest we forget, which could be up to £15k.

And for a large number of transactions that would be right, however not all, which brings with it a number of challenges, not least how those who still don’t complete before the 30th of June might react; plus, of course, this approach is not an ‘existing customers only’ one. In fact, if you were considering a foray into the housing market, then this might well act as the catalyst for you to make that consideration a concrete move.

The layman might look at the Budget announcement and think that, just short of four months until the end of June, is enough to get to completion – and, in a normal time period, that might be the case. But perhaps not now.

What I do know is that the conveyancing firms Broker Conveyancing works with have performed incredibly in recent months, and they will continue to do that, for those cases they are already working on and those new ones that start to come through. Lest we forget, from April, we could see a big push in demand from borrowers who will now be able to access 95% LTV mortgages – they too might eye the end of June deadline as achievable in order to secure the saving.

As has also been pointed out, the pressure to complete by June will be significant because the drop-off in stamp duty saving will be from a maximum of £15k to a maximum of £2.5k. That’s a big difference, although of course anyone buying below £250k between June and September will still pay zero stamp duty.

All in all, I welcome the intervention from the Government because it was undoubtedly necessary and it proves this is an administration that will listen to the industry. It does take away the 31st of March potential cliff-edge, but we await to see whether it will take away that edge completely. It may well provide a little breathing space, but I also suspect it could act as a significant demand driver of cases that will also want to be completed before the new deadline.

No-one is going to begrudge more work, and a buoyant housing market is good for everyone, especially in terms of the overall UK economy, which undoubtedly needs a boost. What we do know however, is that our ‘busy period’ is going to extend for some months to come and, in order to continue working successfully, we’re all going to need to manage the expectations of our clients around what is achievable, and what may be beyond our (and their) reach.