Reports that the Stamp Duty Land Tax (SDLT) holiday might be extended next week will still leave the housing market on a cliff edge if paperwork deadlines are not put in place, according to property law experts, Adcocks Solicitors.
As it stands, the SDLT holiday is set to expire on 31 March 2021 and anyone looking to take advantage of the savings must have completed the sale by the deadline. However, this is resulting in many buyers taking a high-risk strategy, including finding alternative ways to fund the purchase, skipping essential property searches and not having the house valued or surveyed.
Historically, legal transactions relating to the housing market take between eight and ten weeks to complete but in the current pandemic it is taking up to eighteen weeks and even longer in some cases. However, with the 31 March deadline on the horizon, lawyers are facing pressure to submit transactions quickly, while other standard elements are being avoided completely. While an extension is being reported, Adcocks Solicitors is calling on the Government to incorporate a paperwork deadline to ease pressure and avoid similar circumstances at a later date.
Hedley Adcock, Director of Adcocks Solicitors and member of Birmingham Law Society, said: “The SDLT holiday has had the desired effect across the country, however the deadline is adding great uncertainty on the housing market. With buyers taking high-risk strategies to speed up the process, such as skipping essential property searches and not having the property valued, the rush to complete has never been riskier.
“If an extension is announced next week, it is essential that a tapering off period is also granted, such as a paperwork deadline. In other words, buyers who have either exchanged contracts but not completed, or those who can demonstrate they have started a transaction before the deadline and have incurred solicitor costs, for example. This so called ‘grandfathering’ of the SDLT holiday would ease the pressure on the current backlog and ensure searches or valuations are not ignored in order to receive the tax relief. Our worry is that if the deadline is simply extended, we can expect to see buyers continue to take unnecessary risks to aid the moving process in a few months’ time.”