Now that we have a little bit of distance between us and last month’s stamp duty deadline that dominated the first quarter of the year, perhaps it would be useful to give a buy-to-let lender’s perspective on how proceedings played out, and any potential lessons that the market can learn from this period.
I think it’s firstly important to consider the incredible influence setting such deadlines can have on market activity and, quite crucially, all of us who work within it. There was never any doubt that purchasers, particularly buy-to-let landlords, were going to look at their ability to buy pre-deadline and feel that if they could make it happen, then it was an option worth pursuing.
It’s been pointed out before but it’s certainly true that if you set a deadline after which it’s going to be more expensive to do something, then it’s human nature that people are going to try to do it before the increase in cost. You do not need a Masters in Human Psychology to work this out, and any future Chancellor/government should think very seriously about introducing such deadlines again and how they can be managed better so that we do not have a situation where workers are under incredible stress and clients feel utterly bereft and angry if they cannot get their completions over the line in time.
From Fleet Mortgages’ point of view we undoubtedly saw our busiest period as a lender in the lead up to 31 March – we dealt with more than a doubling of our previous volumes and I’m pleased to say managed to get the vast majority of it through the system. However, not all cases completed by the end of play on the 31st and, and because of this, I honestly expected to have received a number of complaints by now. As I write, the ‘good news’ is that we have had two complaints which considering we were braced for a lot more is a positive, but again is this situation fair? Where can the blame truly be laid?
For instance, in March we had conveyancers sending in incomplete Certificate of Title documentation on expired offers with the expectation that these deals would complete the next day. It’s ludicrous to think that we can be held responsible for that but the blame may well be laid at our door.
On that very point – conveyancing – this period has certainly made clear to us that not all conveyancing firms are the same and that advisers and clients need to think very carefully about who they recommend and their ability to get the job done. For instance, in the area of limited company buy-to-let cases it’s a simple fact that the conveyancing process is different from a residential mortgage and therefore it would make sense to use a firm, for example such as Goldsmith Williams, that is well-versed in this area, has the specialist knowledge and experience, and is comfortable working with a lender like ourselves.
To recommend a firm who is untested in this particular sector of the market, or to even go to a solicitors’ which does a minimal amount of conveyancing each month, would be a bad move. I’m often staggered that so many housing/mortgage professionals are still comfortable with letting the client ‘out of their sight’ when it comes to conveyancing because, quite frankly, you have no clue who they’re going to instruct or what the quality of that service/that firm’s employees are like.
I spoke to Eddie Goldsmith, partner at Goldsmith Williams recently, and it hit home just how important an experienced solicitor is to a deal. In the lead-up to the deadline my staff knew that if they were dealing with a firm like Goldsmiths’ (and many others I might add) then that case had a better chance than most of completing before 31 March. On the flip side, there are some firms – who will have been recommended by advisers – who quite simply did not carry out the work properly and ultimately those cases did not make it past the finishing line.
Now, this being the case, firstly what would the client think of that firm, but also what would they think of the adviser making that recommendation? So, while you don’t want to see your client left to their own conveyancing devices, you also don’t want to make the wrong call. But, what can you do? Well, how about talking to the lender? If those advisers had dropped us a line for our view on a ‘good conveyancing firm to use’ we would undoubtedly have steered them in the right direction because, purely on selfish motives, using these firms makes the lives of my staff easier, but it also means much more chance of a happy client.
Ultimately, that should be the aim for any adviser and, of course, the lender as well. Having the right conveyancing firm in place is not just a nice to have but an absolute necessity and their value cannot be under-estimated. This is one area where it will pay to do your homework, understand what is on offer, and get the recommendation right first time.
Bob Young is CEO of Fleet Mortgages
