A survey of people currently purchasing property suggests almost a third may pull out if they look likely to miss the stamp duty holiday deadline.
The Guild of Property Professionals surveyed more than 1,000 buyers last week and 31% said they would ditch their potential purchase if completion takes them beyond 31 March, when the holiday is due to end.
While there are over 140,000 more people in the process of buying a new home now than this time last year and an estimated 418,000 homes sales progressing to completion according to Zoopla, with many having been prompted by the stamp duty holiday, there are growing concerns over plans for the re-introduction of stamp duty in April 2021.
There are mounting fears that tens of thousands of property sales could collapse, as buyers struggle to beat the deadline, owed in part to delays in the conveyancing process, after the government confirmed that it “does not plan” to extend the temporary relief offered to property buyers via the stamp duty holiday.
Iain McKenzie, CEO of The Guild of Property Professionals, commented: “If the deadline remains as it is, only a quarter of the sales agreed in January will complete in time. With 140,000 more people waiting to complete sales than this time last year, there will be a significant number of buyers who will have to find additional money for stamp duty if they have not budgeted for it.
“Our hope, and the hope of 71% of the public, was that the government was going to extend the stamp duty holiday, or at the very least, introduce a phasing out period that will ease the pressure on all parties involved, and will prevent a cliff edge.”
More than a third – 38% – said that stamp duty had a big financial impact on the amount they paid, while a further 46% said it had a medium impact on their finances.
The research also found the average value of the property people had bought or were going to buy was £232,500, meaning the average house buyer would face a stamp duty bill of £2,150.
With a third aiming to push through a move quickly to take advantage of the holiday, McKenzie warns many would not have budgeted for this added cost.
He added: “If buyers are unable to complete because of not having the stamp duty money in place, we will see a large number of transactions fall through as a result. In fact, our research showed 83% of those who had moved this year said they would have been likely to cancel or postpone their house move if they had to pay stamp duty, which would have been a disaster for the property industry getting back on its feet after the initial lockdown.
“The signs are there, the stamp duty holiday has been successful, but we need to ensure a smooth transition back to a normal service.”
“A survey of people currently purchasing property suggests almost a third may pull out if they look likely to miss the stamp duty holiday deadline.”
Local Authority Search Indemnity Insurance .
Is this prohibitively expensive for vendors and buyers to take out to get a deal over the line ?
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No, but in most cases it isn’t just LA searches causing the delays.
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Thanks.
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Would lenders accept the above via buyers solicitors to exchange with a short Covid related completion?
any conveyancers on here ?
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If an agent has not discussed the ‘what if SDLT scenario’ with each seller and buyer as each deal has been put together then their pipeline will have an above normal abort rate as 31st March looms. If they’ve not advised their sellers and buyers to incentivise their respective conveyancers and mortgage advisers to prioritise their transaction then they are not advising their customers properly. If they’ve not explained to their sellers and buyers exactly what can be speeded up by acting in advance then their deals won’t get across the line. If they’ve not worked out what the ‘actual’ cost will be should they not reach the deadline and spoken to both seller and buyer and negotiated a ‘plan B’ deal ahead of time then their buyers and sellers will feel aggrieved as rushed re-negotiations at the 11th hour are stressful and emotional and seldom successful. Quite simply if you’ve been driving towards a brick wall at 100mph and not thought about when and how to apply the brakes in time to avoid a crash – then you’re not doing your job properly.
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Good point
Forewarned is forearmed
Where professionals come into their own
“The best way to predict the future is to create it.” —Abraham Lincoln
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Its like groundhog day. The same panic during and after every stamp duty incentive. There may be some re-negs, there may be the odd fall through but in the main the majority of completions will take place.
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It would have been fantastic if it had been extended but it’s not. Glad I’m not a guild member with a survey like that, 31% would withdraw over £2150. Any agent should save that sale.
It is what it is, what it always was and no goal posts have changed. Of my current running sales I expect 95% to complete comfortably in time. From January, I will be advising all buyers and sellers, who may be someone else’s buyer, that they stand a slim chance of achieving completion by end of March. Manage expectations. Delays will be lawyers, lenders and chains building – nothing new there!
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Don’t agree with this article.
There isn’t enough available stock for a third to pull out and this has never happened before on previous stamp duty holidays.
Why do Property eye seem to focus on negative and speculative messages?
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Find it hard to believe that around 120k buyers will pull out if they don’t save an average of £2150. The deadline was set at the start, this has always been known and agents know the average time a transaction takes. What is more, an agent should be readily capable of talking any serious buyers/sellers around this eventuality. Any agents agreeing sales now (which arent that heady dream of cash, freehold & chain free) should surely be advising from the offset that they do not expect a sale to complete within the SDLT deadline- or at least making it very clear that is a serious probability and making plans for this turn of events. Agents who don’t address this now and plough on head down ignoring this reality only to have sales fall apart left right and centre because they didn’t communicate and apply their expertise and knowledge to the transaction will only have themselves to blame.
Interestingly- especially with the online offerings- if I was them I would be having an SDLT disclaimer statement for anyone offering on properties now- potentially a two-tier offer- if we complete during SDLT holiday we will pay £x and of we miss this we will pay £y.
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People knew from the start it had an end date, I don’t see why it should be extended.It wasn’t required in the first place as the market was doing fine.Now the govt has lost money we need and created a potential problem.Hopefully this wont turn out like the end of dual tax relief in 88.
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Surely the point everyone is missing is that with the sheer quantity of transactions, it will be impossible for all to complete in March. Exchange prior to end of March with a phased completion over three months has got to be the intelligent way forward. There simply won’t be the removal companies and hire vans available. Armageddon pursues when people try and move themselves!
equally the government will not be announcing any relaxation to this until 1st March so that all in the pipeline will have a chance but those yet to offer will not have time. All seems quite obvious to me. We just have to wait and see 🙂
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Any half decent agent should be able to save a sale for the sake of £2150. If they can’t they should probably look for another job.
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