Stamp Duty Cliff Edge - Tips for Buyers and Sellers

Buying and selling a house can be stressful and complex process at the best of times. But add Covid restrictions and a looming Stamp Duty cliff edge has ratcheted up pressure.

Warning lights are already flashing. The current national average transaction time is now more than six months and growing.

A combination of pent up demand due to the first lockdown, a rush to complete before the Stamp Duty holiday on homes under ￡500,000 comes to an abrupt stop at the end of March, and the latest Covid restriction, has created the perfect storm.

The government is under increasing pressure to extend the holiday, but so far there’s little sign it will.

So in the meantime, people in the process of buying or selling can take a number of steps to help speed up the process or reduce delays in order to help get a sale over the line before the deadline.

Here are our top tips:

Be organised:

Make sure you have all your paperwork ready and available. Every ten minutes you spend rifling through your stack of documents to find that one elusive bit of information or file adds up over time.

Get Finances in Order:

Being a cash buyer puts you in a strong position to move forward with a purchase. But it’s also important to make sure mortgages are ready and your bank has all the information needed to proceed with a purchase.

Be responsive:

It’s not always possible to respond immediately – sometimes a reply will depend on getting information from somewhere else in the chain or system, such as a survey result. But if you’re able to respond, the sooner you do, the quicker the process is likely to be.

Keep in touch:

A good relationship with your or your seller’s estate agent is always a good idea. Clear and open dialogue usually pays dividends. A quick chat on the phone can solve an issue far faster than corresponding in writing.

Understand the chain:

Foreseeing problems and working to avoid them is the golden rule of smooth house sales. Chains are inherently problematic. If you’re aware of a potential pinch point somewhere along the chain where a delay might occur, you can work that into your plan and it won’t come as such a surprise. It will also mean you can flag it to your solicitor, agent or their agent.

Be flexible:

Dates and times can slip so try not to be too rigid with your schedule. If there’s any way you can add flexibility – giving yourself a broader window to complete, being open to renting for a time if you’ve not found your dream home yet or your next purchase is delayed, are all things that can give you flexibility.

Be aware of impact of Covid restrictions:

Like other areas of the economy, the housing market has been significantly impacted by government coronavirus restrictions.

Social distancing rules, reduced staff numbers due to self-isolation and so on, is affecting the market. It’s being felt in many ways, such as a reduction in the number of agents available to do viewings to impacting local authorities responsiveness to survey and search requests.

Understanding these issues will help you build a robust plant to cope with this difficult landscape.

Contingency:

In any significant financial transaction or commitment, it’s always advisable to budget for contingency. It’s easier said than done, but try to put aside some extra funds for ‘what ifs’ or plan bs. With so many variables in the chain, a simple transaction is rare.

It is worth planning for what might happen – everything from finding out you need to do a little more renovation on your new place than first thought, or being caught on the wrong side of the Stamp Duty holiday.

If you have money aside, it buys you options.