I’m writing this on ‘Black Friday’ and have just seen some photos of Oxford Street on the same day last year. The difference is notable – 2019 is a hive of activity, every space taken on the pavement and queues out the doors; today it looks like a still from 28 Days Later – let’s just say there aren’t many people about.
When we talk about the overall impact of the pandemic on specific sectors, this really highlights what retail, hospitality, travel and tourism are all up against. Even with vaccines perhaps being just weeks away, these are sectors which will take years to recover; for some it is already too late.
We, in the housing market, are of course much more fortunate. Lockdown 2 is about to come to an end, but let’s be honest, we have not really seen much change from before it was introduced. The housing market has been kept open and we are all hopefully seeing the benefits of that in terms of ongoing transaction levels.
However, there is a lot of difference currently between ongoing cases and those poised for exchange/completion. While we might anticipate a lot of the latter during January and February, there are obvious worries about those cases who simply won’t get there before the end of the stamp duty holiday deadline.
I saw another set of photos on Twitter just this week from a conveyancing solicitor which seemed to sum up the predicament for many. On the right a stack of case files at least a foot high, apparently all waiting for information from other parties to be progressed; on the right, a ‘pile’ – if you can call it that – of perhaps one/two cases which were moving forward.
That was just one conveyancer – extrapolate that out across the entire industry and you can see why Rightmove is suggesting 650,000 property sales are now waiting to move to completion, a 67% increase on this time last year. It also suggests that two-thirds of those number will be wanting to complete before the end of March.
How feasible is that, without any sort of stamp duty holiday extension, only time will tell but we might believe that, without everyone involved in a transaction going on the ‘B’ of the ‘Bang’ then the likelihood of a completion becomes less and less.
So, where do advisers sit within this? Well, clearly as time does move on there is going to be a need for a ‘voice of reason’ in this process. And that will be you.
We would all like to think that cases already in the system have a good chance of completing, but the truth is unless mortgage cases are fully packaged, unless conveyancers are instructed on the marketing of a property or as soon as an offer is accepted, unless searches have been applied for immediately, unless the vital information about a property is being collated right this minute, and unless all others on which a transaction relies to progress are doing their jobs efficiently, then this could end up being a dead-end.
Of course, for some clients securing the stamp duty saving is not the be all and end all, but we might all have some tricky questions to answer if a client is banking on this, hasn’t been told it might not be do-able, and there ends up being no holiday extension. It’s for these very reasons that Broker Conveyancing has now update our quotes and website with wording to highlight there is no guarantee a case will complete before the deadline.
This is one of those periods when honest is without doubt the best policy. Of course, new business is welcome however it will be best to understand the client’s motivations right now and how firmly a stamp duty saving sits within them. They will need to consider the fact that a completion might not be achievable in the timescale, and they should also have a clear idea of what they will do if that is the eventual outcome.
We move into December with many conveyancers already working at capacity. Some have already been telling clients they will not be able to complete their cases in four months. Others will be able to do so, but it will rely on many separate and disparate factors not least the type of transaction, how long the chain, how motivated the other stakeholders, and just how important a pre-31st March completion is.
These are factors likely to be out of your control but you may end up with the blame placed, at least, somewhere near your door, should it not be achieved. Far better therefore for everyone to be upfront now and to prepare themselves for such an outcome. Whatever happens, the gateway to completion will continue to narrow as time moves on – clients must be made aware of that at the earliest opportunity.
Mark Snape is managing director of Broker Conveyancing