Speed up my move before the end of the stamp duty holiday?

What can I do to speed up my move before the end of the stamp duty holiday?

Overwhelmed conveyancers, search delays, mortgage application backlogs and additional difficulties caused by the coronavirus crisis, mean that property sales are taking much longer to complete at the start of 2021.

Towards the end of 2020, the average residential property transaction was taking around 5 months to complete. With the nation now plunged into a third lockdown, the situation is unlikely to ease anytime soon.

As a result, many buyers may miss out on the stamp duty holiday that ends on 31 March 2021.

Nevertheless, there are a number of steps that buyers and sellers can take to help prevent some foreseeable delays and keep their transaction moving forwards.

How does the stamp duty holiday work?

To help mitigate COVID-19's effect on the property market, in July 2020 the Government abolished Stamp Duty Land Tax (SDLT) on residential properties sold for £500,000 or under in England and Northern Ireland.

Saving the average homebuyer around £2,000, the measure has contributed to a significant upsurge in the number of property sales being agreed.

The Government is under increasing pressure to extend the holiday, but the Chancellor has remained silent on the issue. Given recent events, an extension does seem likely, but either way the following tips will help buyers and sellers avoid delays after an offer has been accepted.

Sellers

Instruct a solicitor ASAP

Much of the legal process involves gathering information and various other formalities. If these formalities are completed as soon as possible after you put your property on the market, it may prevent delays once you have a buyer.

Conveyancing is, in the main, a process of due diligence carried out by a solicitor on a buyer's behalf. To get the ball rolling, the seller's solicitor must send a draft contract and supporting information to the buyer's solicitor. The buyer's solicitor will review this information, raise enquiries (ask questions) about the property and report back to the buyer.

Although most of the legal work on a property transaction is carried out on the buyer's side, the conveyancing process cannot commence until the buyer's solicitor receives the draft contract pack.

Chris Salmon of Quittance.co.uk said, "To get your sale off to the best possible start, the aim should be for your solicitor to send the draft contract pack to the buyer's solicitor a day or so after you accept an offer, rather than weeks later."

"There is no reason why this cannot be accomplished if all of the preparatory work has been done during the marketing phase."

Complete the solicitor's instruction forms

Before your chosen solicitor can represent you, a number of steps must be completed. You will need to accept their conveyancing quote and read, sign and return their terms and conditions. The solicitor will then need to verify your identity and carry out anti-money laundering (AML) checks.

Complete the property forms

With your solicitor instructed, you will need to complete the standard property transaction forms. These forms are detailed questionnaires including the TA6 Property information form, the TA10 Fittings and contents form, and the TA7 Leasehold information form (if you are selling a flat).

These forms are lengthy and there may be a temptation to procrastinate. Some of the questions on the form can be technical or confusing. You must answer the questions honestly, but your solicitor can advise on how best to answer technical or tricky questions.

The forms will be sent to the buyers solicitor as part of the draft contract pack - so complete and return them to your solicitor without delay.

Locate documents

Time is often wasted during the conveyancing phase while sellers search for documents. If you carried out any electrical or building work, for example, you should locate any electrical certificates or building regulations documents. You may also need to find any relevant guarantees, FENSA documents, gas installation certificates, party wall agreements and so on.

If your property was a recent new build, you should find any applicable warranties, such as the NHBC warranty.

These documents, along with anything else that might be relevant, should be forwarded to your solicitor without delay.

Raise any issues

If you think that there is anything that could negatively impact your sale, such as an unresolved dispute with a freeholder or work carried out without planning approval, tell your solicitor as soon as possible.

With your solicitor instructed well in advance, they can work out how best to resolve any issues, or present them in the best possible light.

Leasehold properties

If you are selling a flat, your solicitor will need certain other documents, including a copy of the lease. These documents are usually readily available.

However, the buyer's solicitor will also need to review the management information pack, containing service charge and ground rent accounts, insurance details, information about planned works and details of any disputes.

Your solicitor will need to apply for the pack from the freeholder or managing agent. The time it takes to obtain this information is a common cause of delay. Some managing agents take weeks to turn an information request around. With many agents reporting backlogs, sourcing the information is taking significantly longer.

If you are selling a flat, it is critical that the management information is requested as soon as possible - ideally in advance of accepting an offer. You will normally have to pay between £300 and £500 to the managing agent, but this pales when compared with the cost and inconvenience of delays.

Choose the right buyer

If you are lucky enough to receive multiple offers, choosing the right buyer can have a real impact on how long it takes to exchange.

The highest offer is not always the best offer. There may be other factors to consider. If the prospective buyer is buying without a mortgage, is chain-free, or (better still) both, they should be able to exchange much quicker.

The longer a transaction drags on, the greater the chances that your sale might fall through. These considerations may trump a higher offer - especially if you are racing to complete before the stamp duty holiday ends.

Communication

With your solicitor instructed, your initial focus should be making sure they are able to issue the draft contract pack as soon as you find a buyer. Before you instruct, ask your solicitor to confirm that they will be able to do this.

Once you have completed the forms and provided any documents, ask the solicitor if they have everything they need to get the draft contract pack out without delay.

Give your agent your solicitor's details as soon as you have them. Ask your agent if they can send the sales memo (including details of the buyer and the property) out to the solicitor immediately after you accept an offer.

Buyers

The lion's share of the pre-offer work can only be completed by the seller's solicitor. However, buyer's should still take proactive steps that can shave weeks off the start of the conveyancing process once you find a property.

Sort out your finances

Mortgage lenders are swamped with mortgage applications. Some lenders are taking a week or two to process an application, others are taking months. Ask your prospective lender how long an approval could take. If it sounds too long, speak to another lender.

Once you have chosen a lender, select a mortgage product and ask for an agreement in principle (AIP) whilst you are still house hunting.

Instruct a Solicitor

Conveyancing solicitors are unable to cope, efficiently, with the current volumes of work. Some firms are refusing to take on new instructions. Others are quoting new business on the assumption that the SDLT deadline will be missed. Delays are likely if you don't instruct a solicitor before you find a property.

Apply for property searches

Your mortgage lender will expect various searches to be carried out. These include a Local Authority search and a water search. Most councils and local authorities are inundated with search requests. Some authorities are quoting turnaround times in months. You can't apply for searches until you find a property to buy, but you should make sure your solicitor applies for searches immediately after your offer has been accepted.

If you are a cash buyer, you may be able to proceed without searches. Ask your solicitor about the pros and cons of this option.

Arrange the survey

Surveyors are also working on long lead times. If you intend to have a survey contact a surveyor and arrange it immediately. If the surveyor cannot work to your timeframe, speak to other surveyors and see if an earlier slot is available.

Alternatively, contact your lender and ask if their surveyor can carry out the property survey at the same time as the mortgage valuation.

Conclusion

Instructing a solicitor when you put your property on the market is a no-brainer. You may be reluctant to incur any costs before you have a buyer. As most conveyancing solicitors offer no move, no fee conveyancing, there really is no financial reason to delay.

Communication is probably the most critical part of the conveyancing process. Keep your solicitor and agent in the loop at all times by CCing them in on all emails.

If you think your emails are being ignored, pick up the phone. Don't worry about being a nuisance - it's better to be a bit pushy now than in mid-March, when it may be too late to make a difference. Communicating with your solicitor regularly will help keep your transaction at the top of their mind.

If it looks like there is a risk that your transaction may not complete before April 1st, make a contingency plan. Buyers should consider what their position will be if they have to pay the SDLT. Will your purchase still be financially viable? What will the lender's position be?

Approaching the deadline, sellers should anticipate a renegotiation attempt from the buyer. Broaching the topic upfront with the buyer would be advisable. Already some buyers and sellers are agreeing to split the difference if the deadline is missed.