When Chancellor Rishi Sunak delivered the 2021 Spring Budget on 3 March, the property sector listened with bated breath. We were eager to find out what approach the Government would take: would it continue with temporary relief measures to support homebuyers amid the pandemic? Or would it choose to bring these policies to an end in order to focus on tackling public debt?
Of course, the Chancellor opted for the former. Most notably, Mr Sunak announced that the Stamp Duty Land Tax (SDLT) holiday would be extended until 30 June. This means that for three more months, homebuyers are able to take advantage of the tax relief if purchasing real estate in England or Northern Ireland.
Introduced in July 2020, the stamp duty holiday has certainly kicked the property market back into gear, and the extension has fuelled activity further. According to MoneySuperMarket, first-time buyer enquiries increased by 472% in the first week of March when compared to the first week of February. Rightmove also received over 9 million site visits on the day the extension was announced – the highest volume of daily traffic recorded.
This is welcoming news for the Government. After all, the aim of the holiday was to ensure the market was buoyant and there was a boom in transactional activity, which should improve the health of the wider economy as the country transitions out of lockdown. The big challenge now, however, is ensuring that as many buyers as possible can actually complete on their transactions before the holiday deadline.
There is understandably a great of focus at the moment on the delays many buyers are facing when applying for mortgages. However, we should not overlook the strain being felt by those involved elsewhere in the property transaction process – most notably, conveyancing.
In the early months of 2021, it was clear conveyancers were under significant pressure to complete as many property transactions as possible prior to the original SDLT holiday deadline on 31 March. The extension provided some relief, but in reality, this has only delayed the inevitable bottleneck of sales that conveyancers will have to manage prior to end of June.
The effects are already on display. An in-depth analysis of public data by GetAgent.co.uk revealed that the total time to sell a property – from the initial listing to the completion of the sale as recorded by the Land Registry – is now sitting at an average of 295 days. It also noted that while sales are being agreed to, the delays arise at the closing stages of the transaction when the necessary legal work needs to be completed. Suddenly, a three-month extension of the holiday does not seem that long.
As with any line of work, the introduction of high demand and tight deadlines can drastically increase the chances of human error. What’s more, given the number of parties involved in a transaction, delays at one stage of the buying process can lead to frustrations and mounting pressure on other stakeholders. The fallout is significant – in the worst-case scenario, a buyer could ultimately miss out on tax savings of up to £15,000 if their purchase is not completed by the end of the SDLT holiday.
From a policy standpoint, it would make sense to extend the SDLT further or initiate policy so that sales agreed to prior to the 30 June will still qualify for the tax relief, even if the sale is not finalised until after this date. Unfortunately, this does not look like it will be the case.
For conveyancers, then, they must look elsewhere for a solution to the problem. Specifically, they must openly embrace technology to ensure they can streamline existing processes and communicate transparently and effectively with all parties involved in the transaction. By doing so, they will also reduce the chances of human error or unforeseen complications. Fortunately, the adoption of technology by conveyancing firms is not a new phenomenon; it is a trend that had already taken hold prior to the pandemic but has since been accelerated due to Covid-19.
Embracing technology at a time of need
As with large sections of the property industry, conveyancing firms have slowly been coming to realise the benefits of technology in delivering a superior service or achieving efficiency gains. The initial resistance to technology by conveyancing firms was not a stance taken by choice. Rather, I believe it was more of a consequence of these firms simply not having the knowledge.
Yet the pandemic, in preventing human interactions and travel, has driven home the value of technology. For example, eSignatures and automated communication can shave days off a transaction. Client onboarding, which typically takes around two weeks, can now be completed in as little as 40 minutes by embracing digital solutions.
Taking all this into account, technological innovations like these are permanently transforming how conveyancers function. And the timing couldn’t be better, with the SDLT holiday naturally making it near impossible for conveyancers to meet demand if relying on outdated practices.
All that being said, I call for the property sector to be understanding of the pressures faced by one another at the moment. Every organisation is doing what it can to ensure transactions are completed before the deadline, even with the obstacles posed by the pandemic. That’s why InfoTrack is backing the industry’s ‘call for kindness campaign’, which asks solicitors and conveyancers to be mindful of their peers. We live in extraordinary times, and these coming months are set to be a busy period for everyone.
Overall, buyers and sellers are seeing first-hand just how technology can be used to simplify all parts of their lives. Naturally, these expectations are spilling over into the property and finance sectors. That’s why it is safe to assume that we will be seeing significant investment into technology beyond the SDLT holiday period by conveyancers. Doing so will ultimately serve to benefit the property sector as a whole.
Original Article from Financial Reporter 06/04/2021