"While this might be good news for the property market, considering how we started 2020, a stamp duty holiday doesn’t necessarily mean that buyers are flocking to market with their cheque books in hand."
This came after month-on-month property enquiries fell from around 100,000 per month in February 2020 to around 40,000 in April, and is intended to reignite the residential property industry as the UK moves through the remainder of 2020 and into the first quarter of 2021.
Essentially, this means that any purchase of residential property up to a value of £500,000 will be exempt from paying any tax.
Temporary reduced rates
The SDLT holiday will be in effect from 08 July 2020 until 31 March 2021, giving those who were considering a residential property purchase before the pandemic a golden opportunity to make good on their plans. The Chancellor hopes that the increase of the nil rate band for stamp duty purchases over £500,000 (which equates to massive financial savings) will attract buyers back to the market.
How conveyancers can assist
While this might be good news for the property market, considering how we started 2020, a stamp duty holiday doesn’t necessarily mean that buyers are flocking to market with their cheque books in hand. People are weary, and aren’t sure how the property purchase process has been affected by the Covid-19 pandemic.
For this reason, reluctant home buyers should consider partnering with conveyancers who know the law and who are confident in their ability to complete property transactions at this time in history. A large spanner in the property market works is that physical property inspections are challenging. However, contracts can still be exchanged and purchases can still be finalised at this time.
In situations where the property is not occupied, transactions can continue as normal and buyers can move in as and when they see fit (as long as they adhere to all social distancing regulations). However, if a property is occupied at the time of sale, it is recommended that parties involved defer completion and property exchange to a later date (when social distancing regulations are not likely to still be in effect).
If contracts have already been exchanged, parties should agree on a completion deferment. If contracts are yet to be exchanged, the transaction should be delayed where possible and all risks of completion should be considered before proceeding.
Risks of exchanging contracts
As mentioned above, parties should be willing to sit at the negotiation table and plan the property sale so as to accommodate all involved. However, not all buyers are able to delay their purchases – just as not all sellers are willing to wait for their money. Should an agreement not be possible, and the original completion date (as stipulated on the contract) cannot be met for whatever reason, the following risks are carried by the defaulting party:
- They will be liable for the payment of late completion interest for the period between the agreed completion date and the actual completion date;
- If the seller is ready and able to complete, a notice to complete can be served. If completion does not take place by the stipulated date, the contract can be terminated and the buyer might lose their deposit.
Buying or selling a property in the year of Covid-19 doesn’t have to be a frightening undertaking. Get peace of mind by partnering with property professionals who change with the times, and who will look after your best interests as you buy or sell a property in these terribly uncertain times.
