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Extension of stamp duty holiday

39 replies

user1471542288 · 26/01/2021 17:50

to be debated by MPs next Monday Feb 1st

OP posts:
Pennykins · 26/01/2021 18:38

I really hope it's extended. We're in the middle of sorting our move but I don't know if we'll make it over the line by March 31st as the solicitor is so busy because of the sales boom and the lockdowns so now everything is taking an age to get done. We had to wait 5 weeks for our homebuyers survey too. It's mad.

LookingUpIn21 · 26/01/2021 18:43

Fingers crossed, I've only just found a property to buy.

Paulina23 · 26/01/2021 20:40

You can always offer a bit less to account for the additional stamp duty from April. All buyers will have the same financial cost so it should not affect the competitiveness of your offer.

Maya0108 · 27/01/2021 22:20

We are in the middle of buying a house. The solicitor advised that searched may take until 6th March. Is there anything the solicitor can do to move thingd along whilst waiting for search results so that we can move to exchanging asap?They have the draft contract from the sellers. Thank you.

Needmoresleep · 27/01/2021 22:26

Your solicitor should be reading through the contract and asking questions now. Is it a flat? If so he/she should have looked at the information from the management company ASAP. Has your mortgage offer been received?

If you do everything in parallel, you should be ready to exchange as soon as the searches come through.

Don’t forget to make a provisional booking on a removal van in late March.

Maya0108 · 27/01/2021 22:33

@Needmoresleep that's really helpful advice. Thank you. Solicitor has undertaken all financial checks etc. The property is a house. They have the draft contract but not sent it to us. Can we insist that they send it or would they hold onto it for any other reason?

MinnieMountain · 28/01/2021 06:29

Dear god. Really? (I’m a conveyancing solicitor).

@Maya0108 you can ask them if you can sign the contract now but it doesn’t mean anything until all the searches and enquiries are back.

Needmoresleep · 28/01/2021 10:02

Maya, I am not a solicitor, but am involved in a surprising number of property transactions as a result of winding up my mother's estate.

What normally happens, and I am more than happy to be corrected, is that there, what might be three tracks.

  1. Mortgage offer. You fill out lots of forms, the mortgage company send in a surveyor to do a valuation (you can also do your own homebuyers or structural survey) and eventually (lots of Covid delays) you get an offer.
  1. Searches. Your solicitor lodges these with the local authority. Some Local Authorities are being very slow.
  1. The contractual/conveyancing stuff. In my experience the vendor's solicitor asks the purchasers solicitor whether they are content to use standard forms, ie contract and questionnaire, which includes all sorts of things like are there problems with the neighbours, and whether carpets and curtains and white goods will be included. Once received, the purchasers solicitors will raise questions. If it is an older property there may be obscure covenants, or if the boiler was not serviced recently they may ask for some form of indemnity, or for FENSA certificates for new windows, and, and, and. The will obviously have to check title and so on. Your solicitors are also almost certainly working for the mortgage company so would have things to do for them once the mortgage offer is in. The contract can be signed at any point, but should not be exchanged until all the queries have been sorted.

(4) If it is a flat there will be another set of work requiring information from the management company (some of whom can also be very slow.)

In normal circumstances you might choose to do the three stages sequentially. Then,, if you don't get your mortgage offer you don't waste money on searches etc. But these are not normal times.

I am assuming that the financial checks (passport etc) are the checks the solicitor needs to do before taking on a client who plans to purchase a property. This is nothing to do with the purchase itself.

Is the estate agent any good?

I would talk to them about getting a clear set of milestones, for both sets of solicitors. They only earn money if the sale goes through, so up to them to put in some work. If the individual agent is inexperienced, you might speak to the branch sales manager. They will know better, but I suggest:

  1. for the vendors solicitor to get the contract pack out.
  2. for searches to be put in
  3. for queries to the to be raised etc.
  1. At the same time keep an eye on the mortgage offer. If you are using a broker get them to give you an estimate of how long it will take.

The aim is to have everything in place at about the same time as the search results come through. (If it is an ordinary residential neighbourhood it is unlikely that there will be major shocks in the searches.)

I hope that helps.

BTW I am more than happy to be corrected by someone who understands the process from the other side.

I once bought a property in 2 weeks - sheltered housing for my mother - but it was cash, and I used a solicitor who knew the block so we were comfortable skipping both searches and survey. You can do it by 31 March, but you will need to be assertive and demand that busy people give you priority. And also be clear/reasonable on what you expect to be done when.

GenderApostate19 · 28/01/2021 11:02

How will offering less help with stamp duty? Fine if you have tons of equity and can decrease the deposit without increasing the mortgage rate.
For a buyer with a 10% deposit, it won’t make a lot of difference, DD knocked her vendor down £8k, so £800 less deposit, which helps but doesn’t nearly cover the £3400 SDLT.
She thinks they will extend the holiday, I really don’t.

Needmoresleep · 28/01/2021 11:38

I am trying to sell a flat before the deadline. If we don’t make it I fully expect to either:

  1. Accept a reduced offer from the current purchaser
  2. Put it back on the market at a lower price

More generally I expect house prices to fall in line with the general retraction of the economy...or more. Especially if interest rates rise.

MinnieMountain · 28/01/2021 13:59

@Needmoresleep my employers have 2,000 “priority” files right now. Another client being pushy really isn’t going to get anywhere.

Needmoresleep · 28/01/2021 14:24

I am not suggesting being pushy. However if a solicitor has taken on too much work, a buyer sitting back and doing nothing would almost guarantee they are at the back of the queue. Things will get worse, not better before 31 March.

Which is why I suggested using the estate agent at a level where there is experience.

They may start off with a lot of questions: has a request for searches gone out, has a standard contract and questionnaire been agreed on etc, and end up setting realistic targets together, with subsequent monitoring of whether they have been reached.

I have been involved in three transactions using one conveyancing solicitor. The first sale was urgent and happened quickly, but the solicitor was clear, that he had a lot else on his plate and could not start on the next for a couple of weeks. This one needs to be completed before March 31. Its a sale and it is the purchaser's solicitor who is being slow. My solicitor has therefore copied me on the chasing, and I am using the estate agent to chase and to persuade the buyer that everything needs to be done in parallel. This means that we now have confirmation that searches have been ordered, and queries raised despite the mortgage company only doing its valuation this week. The buyer seems very happy that everyone is working together to make it happen. The third property can't happen until we receive some key HMRC document (it is all probate property) so I am not pushing at all, and I suspect no progress is being made. I probably speak to the solicitor far less frequently than most clients. Indeed I don't think we have spoken since late November, and only had a couple of (important) email exchanges since then.

The biggest mistake can be to use cheap conveyancing companies, especially for purchases. Better to find someone local or well recommended who knows the property, who is on the lender's panel, and who has not taken on more work than they can manage, so has time to look at the detail.

2,000 priority files sounds unrealistic. What would you suggest OP does if she is one of them?

mountains76 · 28/01/2021 20:39

How many solicitors are sharing those 2000 files?

waitrosetrollydolly · 31/01/2021 13:46

I think it's wrong that we should be charged a tax when we move. We pay tax when we earn, then pay more on items we buy. Then more if we happen to buy a property, hell more again if we own more than one! And then when we die all our assets are taxed again before it goes to our loved ones . Enough already! ( sorry rant over )

user86386427 · 31/01/2021 14:17

@waitrosetrollydolly how else do you propose funding healthcare, education, defence, pensions etc etc...? Taxes are a necessity. Though I'd certainly welcome a more fair distribution particularly corporations.

Sprockerdilerock · 31/01/2021 19:05

I hope they scrap it and I'm normally all for higher taxes. Or at least keep the threshold at £500K.

A normal family house where I live (talking 3 beds/parking etc) is in the £350K region. Stamp duty of £8K is an insane amount of extra money for ordinary working families to have to come up with. Its so terrible for mobility. I could understand a tax on really expensive properties but it just seems cruel to whack such a hefty charge on a basic family home.

It is less of an issue to people who bought yonks ago as they have plenty of equity to use, but its hard enough for people who bought more recently to move up the ladder as it is!

I've got my fingers crossed for tomorrow, hope all you movers are lucky!

bmachine · 01/02/2021 09:15

Does anyone know if they would make a decision /announcement today or is this just a debate?

SheWouldNever · 01/02/2021 09:39

Really hoping, if no further stamp duty extension, today gives some clear indication on whether there’s a complete cut off after 31st March or a tapering for those already in the process. Our buyers are pushing for completion before end of March, meanwhile our purchase could be ready to complete March or April, too early to call but I’m preparing for the whole thing to fall apart if our buyers don’t make the stamp duty deadline.

jimmyjammy001 · 01/02/2021 10:26

If it doesn't get extended then buyers and sellers will just have to re negotiate the price by the stamp duty saving, house prices have allready gone up by over 7% as a result of the stamp duty holiday, sellers will just have to reduce accordingly, it is unlikely that they will achieve asking price pre stamp duty holiday if they went back onto the market as buyers will need to set aside funds to pay for the stamp duty after the deadline. Which is good because it means house prices come down and so everyone benefits and the tax can go towards paying off the covid debt.

PowerslidePanda · 01/02/2021 10:50

@jimmyjammy001

If it doesn't get extended then buyers and sellers will just have to re negotiate the price by the stamp duty saving, house prices have allready gone up by over 7% as a result of the stamp duty holiday, sellers will just have to reduce accordingly, it is unlikely that they will achieve asking price pre stamp duty holiday if they went back onto the market as buyers will need to set aside funds to pay for the stamp duty after the deadline. Which is good because it means house prices come down and so everyone benefits and the tax can go towards paying off the covid debt.
Not that simple. It remains to be seen whether our sale will go through by the deadline, but if it doesn't, it will be the fault of our buyer and their solicitor. We instructed solicitors immediately - they chose to wait 6 weeks until their mortgage offer was through. We've turned all enquiries around within 48 hours - they've sat on them for weeks. If they don't make the deadline, like fuck are we going to reduce the price because of it!
SheWouldNever · 01/02/2021 11:17

@jimmyjammy001 that theory works for sales agreed at asking prices (which I agree, have been inflated). We accepted an offer £15k below asking and cannot reduce further. We agreed a price on our purchase property making sure we could pay the full stamp duty as offering in late Nov it was always going to be touch and go as to whether we would make that deadline. But we agreed our buyers offer 1 month earlier, and my concern is what if they aren’t willing / didn’t plan for paying stamp duty? We can’t afford to reduce an already reduced sale price further, so I’m speculating the odds on our family of 6 plus dog and cat having a mad scramble to vacate before 31st of March, before our purchase property is ready to exchange. I do hope it’s helping some buyers, but for us the whole stamp duty holiday has been a PITA, really.

There will be some buyers who have accounted for the fact they might have to pay stamp duty, and others who have been more hopeful that they might get in within the holiday and have budgets that will only work if they do complete before end of March. I foresee lots of sales falling through if there is no tapering of the stamp duty deadline.

PowerslidePanda · 01/02/2021 11:27

@SheWouldNever - I agree, and I think there will be a tapering of it for that reason. The big question is whether the government has the foresight to realise that this needs to be announced now, or if they're going to stick to their hard deadline, wait until chains are falling through left, right and centre and then realise, "Oh shit - we'd better taper it!" Which will be too late in many cases.

Paulina23 · 01/02/2021 12:47

The fire safety regulation issue prevent millions of flats to be sold not I m not convinced that government will take time and budgets to accommodate for incomplete transaction with a tapering mechanism when so many urgent issues need addressing. After all, it had the effect of supporting the housing sector at large for the last 10 months. We shall see.

PowerslidePanda · 01/02/2021 13:16

Hmm, good point...

HumourReplacementTherapy · 01/02/2021 15:04

Fingers crossed they go for an extension.
Our buyers have been really patient with us but we only found somewhere last week.
We won't leave out buyers 15k short so will move into rented but it's such a pita if we have to do that.

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