In July 2020, the Government announced a stamp duty ‘holiday’ to stimulate the COVID-battered housing market. Since the launch of the scheme, the number of property transactions has skyrocketed.
Conveyancing solicitors, surveyors, mortgage lenders and local authorities were already facing the challenges of working in distanced, COVID-secure environments, and with reduced staff. The surging property market has put more strain on these groups, leading to delays.
The race to the finish
With this Stamp Duty scheme due to end on 31st March 2021, there is yet more pressure to complete sales before the deadline.
For many homebuyers, particularly first-time buyers, it was the savings offered by the stamp duty holiday that made their transaction possible. Some transactions that do not complete before the end of March may collapse.
Although it is now likely that many transactions that have only recently started will not complete before the deadline, there may still be time. Even with the delays caused by high caseloads, backlogs and short-staffing, there are steps that buyers and sellers can take to give their transaction the best chance of success.
Instruct a solicitor now
Whether you are planning to sell or purchase a property (or both), the sooner you instruct a solicitor, the better.
Many homemovers wait until they have made or accepted an offer to find a conveyancing solicitor, but there is really no reason to wait until this point.
Before your solicitor can start on the actual legal work for your property, they will need to verify your identity and complete anti-money laundering (AML) checks. The process is straightforward, and during COVID, can be done online. Nonetheless, completing these initial steps early can shave days off your transaction, particularly if there are errors that need back-and-forth correspondence to resolve.
Tip for sellers
If you are selling a property, you really should instruct a solicitor before you find a buyer, and ask your solicitor to prepare the ‘draft contract pack’ as soon as possible.
The contract pack will contain basic information about your property and the sale, like the address, property type and price, and the pack is sent to the buyer’s solicitor at the start of the conveyancing process. You should also complete the property information forms (‘TA’ forms) as soon as you can, as these can also be done before finding a buyer. The TA forms are long and will require many dates and supporting documents to be dug up from your files.
Get third parties working
Backlogs are plaguing every part of the conveyancing process. Fortunately, many aspects of buying and selling a home can run in parallel. You don’t have to wait for one party to finish before the next stage can begin.
You should get as many balls rolling as you can, including searches, property surveys and managing agents information. Although this may mean that you have to pay for more third-party costs early on, the cost of delays will easily exceed this initial expense. The cost of the extra stamp duty alone, if the deadline is missed, could be several times the total cost of all your moving expenses.
Tips for buyers
Don’t wait until you find a property to approach mortgage lenders, even if you have a good idea of your eligibility. An Agreement in Principle (AIP, or sometimes, ‘decision in principle’) is a key stage in getting a mortgage, and can take some time to organise. Starting the mortgage work early can shave considerable time off your purchase, as some banks and lenders are currently experiencing significant processing delays.
Chris Salmon, a director at Quittance.co.uk, adds, “If a seller has received multiple offers, having an AIP in place shows you are a serious buyer and could make your offer more attractive. You should also confirm as early as possible that your solicitor can act for your chosen lender, as failing to do so can be the cause of major delays.”
Tips for leasehold sellers
If you are selling a leasehold property, you should ask your solicitor to source leasehold information, including the managing agents ‘pack’, immediately.
Leasehold management is carried out by parties of all shapes and sizes, from national companies to individuals. That said, the size of the managing agent is no guarantee that they have efficient processes or that they can respond to pack requests quickly. Even before the pandemic hit, managing agents’ information could take weeks to source. This issue was the main reason why leasehold sales would take much longer to complete than freehold transactions.
Simply put, the sooner your solicitor orders the managing agents pack, the sooner it will arrive. Hopefully any delays will occur in parallel to the rest of the conveyancing process and won’t unduly delay the overall time it takes to complete your sale.
Whenever your solicitor asks you to complete a form or to respond to a question from the buyer’s solicitor, you should aim to reply as soon as you can. Replying quickly serves two key functions; saving time, and keeping your case front-of-mind with your solicitor.
On a basic level, every extra day that you take to respond could add delays to your transaction. As more and more pressure is piled on conveyancing parties in the run up to the March stamp duty deadline, delays will have a cumulative effect. Taking a couple of extra days to reply to an email in August 2020 may not have had an effect, but responding two days faster in February could make a critical difference.
Replying promptly also shows your solicitor that you are eager to keep the process moving forwards. Conveyancing solicitors are busier than ever, with less access to support staff and a greater caseload. If your solicitor trusts you will reply quickly, they may be more likely to keep you on the top of their pile.
Chase for confirmation
Don’t just shoot off replies and hope for the best. If you don’t get confirmation from your solicitor, be sure to follow up a day or so later, by phone or email, and confirm receipt.
Chasing confirmation is particularly important for the key milestones. Check with your solicitor that they have received the completed TA property forms, and that they have sent the draft contract pack to the buyer’s solicitor (or that your lawyer has requested the contract pack, if you are the buyer).
If you are buying, make sure that searches have actually been ordered. If you are selling a leasehold property, get confirmation that the managing agents pack has also been ordered.
Know where you are in the process
Although there are many moving parts in a conveyancing transaction, the process itself isn’t that complicated. There are many websites that set out the legal process for buying or selling a property in detail. Your solicitor may have sent you a timeline or similar document with their initial paperwork.
Tracking the progress of your transaction from step to step will make it easier to see and avoid some delays, and to understand when (or if) you can act to push things forward.
For example, if you know you are missing some documents and certificates, you could speak to your solicitor about getting quotes for indemnity policies before the buyer’s solicitor asks for them. If you are paying for these, that also gives you more time to organise funds.
If you know that your transaction is basically complete but that you cannot exchange because of another sale in the chain, there’s no point sending daily emails to your solicitor. If, however, you know your solicitor has received the TA forms from the seller, you can (and should) push for progress if your solicitor is yet to respond with further enquiries.
Don’t wait to raise an issue
Whatever concerns you have, you should raise them as soon as possible. If you are experiencing communication issues with the person handling your case, if emails aren’t being answered or phone calls aren’t being replied to, don’t stew in silence for weeks.
There may be good reasons for a delay, or there may not, but if you have genuine concerns you should raise them with your case handler’s supervisor or manager, the Head of Conveyancing or Property, or the firm’s complaints department. The sooner you act, the easier it often is to resolve an issue before it leads to serious delays or a collapsed sale.
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