What the Stamp Duty Land Tax Holiday Extension Means for Your Move
Chancellor Rishi Sunak has announced a 3 month extension of the Stamp Duty Land Tax holiday as well as a £250,000 cap on SDLT up until September 2021.
This means that the reduced rates of SDLT which were originally set to end on 31 March, will now be in place until 30 June 2021. And the £250,000 limit will hopefully result in a smoother transition back to the standard rates of Stamp Duty Land Tax later this year.
The extension is a sigh of relief for home movers who were concerned that they were going to miss the reduced rates of SDLT by weeks, or even just days.
But if you’re just beginning your property purchase now, it’s important to know that even though the SDLT holiday has been extended, there’s a good chance that you might not complete on your purchase before 30 June.
It’s not uncommon for property transactions to take up to 6 months where there are delays and chains involved. And with the rush of buyers trying to meet the deadline for the lower SDLT rates, our Conveyancers have seen delays in most property transactions.
While our Conveyancing Solicitors are working hard to reduce delays where we can, if they are a result of a third party it may be out of yours and our control. We will do everything we can to support you through you move, which means being open and honest with you about the timeframes and deadlines involved in moving homes now.
What Could Delay Your Move
Usually, property searches take 3 weeks, but at the moment our Conveyancing experts are seeing searches take around 5-6 weeks and even longer in some areas.
This is because most Local Authorities are delaying searches due to high demand caused by buyers trying to complete before the end of the month. And some Local Authorities will still have staff on furlough too.
While you might think that delays on property searches will reduce now that the deadline has been put back, it’s likely that the rush will continue until 30 June as more buyers hope to move as soon as possible.
And if your property searches bring up any issues, this could put your purchase back even further.
Mortgage lenders have also been facing delays in recent months due to high demand and furloughed staff. This is not only a result of a backlog of movers caused by the closing of the house market in the first lockdown, but also an influx of buyers hoping to make the most of the SDLT holiday.
Telephone hold times have gone from 5-10 minutes to well over an hour for simple requests. Referrals to lenders, which would normally have a 48 hour turnaround before the Coronavirus pandemic, are now leaving buyers waiting 7-10 working days for a response.
We know it’s frustrating if you’re waiting on your mortgage lender to get back to you, especially as some sellers won’t sell to you unless you have a mortgage offer in principle.
It might take you longer than normal to find a mortgage that suits your financial circumstances and price range, as some mortgage lenders haven't been offering mortgages with a deposit of 10% or less. Although we hope after the new government-backed low deposit mortgage scheme means mortgages will soon become more accessible.
You might still need to shop around to find the right mortgage offer for you, which you should try not to rush as it’s a very important decision.
Issues with the Chain
If you’re a part of a chain, moving home can be a long process. This is because if one person pulls out it will affect everyone else in the chain.
And as delays are being felt across the UK right now, it could mean that chains are more likely to fall through or that someone along the line might hold up your move.
You should try and avoid chains where you can, but we know this is difficult if you’ve found your dream home. If you are a part of a chain, it’s important to know that the chances of your completion date being postponed are more likely.
How to Reduce Delays when Moving Home Now
Delays such as the above are unavoidable. But the best thing you can do if you’re moving home now is to:
- Avoid chains where you can
- Start looking for mortgage offers as soon as possible
- Instruct a good Conveyancer who will order property searches right away
Our Conveyancers understand that moving homes during a global pandemic can be very stressful. While the SDLT holiday could save you in the short term, it’s important to make sure your property transaction is completed without any issues so you can enjoy your new home.
While we can’t reduce all of the delays in the moving process, our Conveyancers will update you throughout your property purchase and we will always work efficiently to complete as soon as we can.
Simpson Millar Solicitors are a national law firm with over 500 staff and offices in Billingham, Bristol, Cardiff, Catterick, Lancaster, Leeds, Liverpool, London and Manchester.