The head of one of the UK’s largest conveyancing legal practices is warning the property market could “fall off a cliff soon”.
This is despite the latest house price rises of 10.2 per cent over the year to March 2021, revealed last week in the Office for National Statistics index.
The record ONS figures mark the highest annual growth rate the UK has seen since August 2007.
But Lloyd Davies, managing director of Convey Law - and a senior figure in both the Conveyancing Association and the Society of Licensed Conveyancers - says the housing market had primarily boomed because of the Stamp Duty holiday and Covid19.
He warns: “Currently, buyers are rushing to complete before the end of the Stamp Duty holiday in June to potentially save thousands of pounds. The government has already acted to taper some of the savings until September but that will not be enough for many purchasers. I believe we will see aborted transactions and disappointed house buyers this summer and autumn unless the government looks at a much longer form of SDLT tapering.
“We are asking for the government to allow buyers who have agreed a deal on a property transaction by certain dates - perhaps the start of March for the June SDLT deadline and the start of July for the September SDLT deadlines - to carry through whichever Stamp Duty benefit is in place at the time and be given 12 months to complete the transaction and take the benefit of the SDLT holiday.
“If we do not see the government act, the market is in danger of plummeting when buyers are no longer motivated by the current savings.”
Davies continues: “The conveyancing industry had seen a rise of around 30 per cent in transaction volumes, triggered by the Stamp Duty holiday and also shifting trends in where people can live because their ability to work remotely from the office environment has changed radically. This has impacted on the speed of the conveyancing process and put huge pressure on an already overwhelmed property industry.”
“The Treasury’s announcements on Stamp Duty also coincided with the beginnings of a demographic shift in movement no-one could have forecast before the pandemic. The rapid acceleration in remote working meant people could really move to some of those areas they had dreamt about living in. The proposed tapering relief will relieve working pressures as well as secure the appropriate SDLT relief for our clients.”