Agents should prepare for a surge in fall throughs and collapsed sales thanks to the first stamp duty holiday period expiring at the end of this month.
That’s the warning from chain repair provider HBB Solutions, which says agents need to have a clear plan B if things start to go wrong.
At present, any home worth up to £500,000 is eligible for the stamp duty holiday, but after June 30 - that’s less than two weeks from now - the nil rate threshold will drop to homes worth up to £250,000 until September 30.
Then, from October onwards, the nil rate threshold will return to its pre-stamp duty holiday level of £125,000.
HBB Solutions has been in touch with some of the high street’s major lenders on their cut-off dates for receiving a Certificate of Title (COT) in order to complete on a mortgage by month end.
HSBC/First Direct has a cut-off date of June 21 - that’s next Monday - while Leeds Building Society, Halifax and Barclays have a cut-off date of June 23. For Precise Mortgages, the cut-off is June 25.
Meanwhile, Nationwide/The Mortgage Works has provided no deadline, but says it requires five working days to send funds by BACS and if the notice is less, they will deduct £20 for the CHAPS payment.
HBB Solutions says this effectively means anyone relying on mortgage funding has just days left for their solicitor to complete their work, so the lenders can get the COT next week and release funds in time to beat the deadline.
This, in turn, means there could be many buyers and sellers - relying on savings of up to £15,000 under the current stamp duty holiday rules - pulling out and provoking the collapse of a chain.
“We all know how frustrating it can be when chains collapse. We’ve been fixing them for nearly 11 years now” says Chris Hodgkinson, managing director of HBB Solutions and a former agent himself.
Data earlier this year estimated that one in four sales fall through before completion, costing homebuyers an average of £2,700 each time.
Research from property platform WiggyWam found that, in total, property transactions that fall through cost buyers £607m annually. Sales in a chain – which is the significant majority of sales – are especially vulnerable to fall-throughs.
HBB Solutions believes that, even once the two-stage stamp duty holiday has ended, there could be issues with buyers walking away from a sale because they will no longer benefit from the stamp duty saving.