The countdown is on for homebuyers and sellers in England and Northern Ireland. With significant changes to stamp duty land tax (SDLT) set to take effect in April 2024, the property market is bracing for a frenzy of activity as buyers and sellers rush to complete transactions before costs rise. For many, it could mean thousands of pounds added to their bill overnight. So how can you navigate this high-stakes race against time and ensure a smooth move? We spoke with industry experts to uncover the keys to crossing the finish line before the stamp duty deadline.
Understanding the Stamp Duty Shake-Up
First, let’s recap the looming changes. Come April, the threshold at which SDLT kicks in will plummet from £250,000 to just £125,000 for home movers. That means if you’re buying at the current UK average price of £266,000, your tax bill will surge by £2,500. First-time buyers face an even steeper cliff edge, with their nil-rate threshold tumbling from £425,000 to £300,000. In pricey London, where the typical first home costs £524,000, that translates to an eye-watering £11,250 more in duty.
The reforms, which unwind the special measures introduced in the ill-fated 2022 mini-budget, have already sent shockwaves through the market. Property portal Rightmove reports a spike in first-time buyer demand in the capital as aspirants scramble to beat the deadline. But with just months to go, how can buyers and sellers give themselves the best chance of a timely completion?
Prepare Your Finances Early
For buyers, preparation is paramount. Having a mortgage agreed in principle before making an offer not only proves you’re a serious contender, but also accelerates the process. However, as Andrew Boast of SAM Conveyancing cautions, a final offer hinges on a full application and unchanged circumstances. Gifts from the Bank of Mum and Dad? Be sure to document the source to satisfy anti-money laundering checks, advises BDB Pitmans’ Lorna du Sautoy.
Collate the relevant documents for your solicitors and other professional advisers to avoid any last-minute panics when you’re ready to start moving money.
– Lorna du Sautoy, BDB Pitmans
Justin Moy of EHF Mortgages suggests tackling potential holdups early by compiling bank statements and payslips to sidestep delays. Ordering conveyancing searches promptly once contracts arrive can also trim up to four weeks off the process, notes Highcastle Estates’ Zaid Patel. These reveal any lurking legal issues like planning blight or flood risks.
Home in on the Right Property
While the stamp duty deadline ratchets up the temptation to compromise, Phil Spencer of Move iQ urges buyers to remain steadfast in their search criteria. Don’t rush into a less-than-ideal home purely for the sake of speed. Equally, avoid overpaying just to wrap up a purchase in time. Booking a survey swiftly after your offer is accepted is also key.
It can identify issues that may require negotiation, and provide a reliable basis for requesting repairs, or a price reduction, from the seller. This preparation is essential, as any delays arising from financial, legal, or repair negotiations can be costly if trying to complete before the changes.
– Andrew Boast, SAM Conveyancing
For sellers, choosing the right estate agent who understands your local market and the time pressures at play is critical. They should guide you in setting a realistic asking price from the outset, rather than overvaluing and chasing the market down, says Paul Hardy of LSL Property Services. Inflated prices followed by reductions not only delay a sale, but also increase the chance of a fall-through.
Build the Right Team
Selecting a conveyancing solicitor well-versed in the intricacies of SDLT and the vagaries of the pre-deadline rush is equally vital. Look for firms accredited under the Law Society’s Conveyancing Quality Scheme, says Helmut Elstner of The Mortgage Clinic. They should also be comfortable handling documents digitally to dodge postal delays, adds Boast.
Having planning consents, building certificates and guarantees collated early can help preempt hold-ups further down the line, notes du Sautoy. Sellers of flats are advised to request management packs containing service charge and lease info as soon as their property hits the market.
Communicate and Set Clear Timelines
Keeping all parties moving in lockstep is essential to achieving a pre-deadline completion. Property investor Abi Hookway recommends stipulating your target date in the memorandum of sale shared between solicitors. This helps bind everyone to a common goal. Where possible, avoid buyers mired in lengthy chains that can breed uncertainty, says Elstner. First-timers or those with a mortgage offer already in hand can generally move quicker.
In a market where speed is of the essence, clear communication is king. From buyers being upfront about their ability to proceed to agents ensuring important details flow between parties, a smooth information cascade can help avert stalls and disputes. As the stamp duty reboot draws closer, these marginal gains can make the difference between sailing over the line and stumbling at the last.
With careful planning and proactive steps, homebuyers and sellers can still seize their moment before the tax hike bites. But as the clock ticks down to April, the window for a seamless move is swiftly closing. For those dreaming of a new chapter or seeking pastures new, the message is clear: act now to land your place before the stamp duty sting. The property starting gun is poised – don’t get left in the blocks.
