How has the pandemic shaped the future of the property market?
The recent stamp duty holiday did much to get the housing market moving, which was good news for buyers, sellers and estate agents. However, other processes have been slowed down considerably, and solicitors and conveyancers have had to make some big adjustments. I caught up with James Singleton from Fletcher Day to discuss the effect of the pandemic, what we’ve learned from it and how the UK could improve its house buying and selling process in future.
How did the pandemic affect conveyancing and property sales?
It’s been a big shift and a lot of thinking had to be done. The main effect has been the slowing down of all the processes involved in buying or selling property. One of the first changes was having to come to terms with sharing proof of ID over Zoom, but after a period of adjustment, we streamlined the new process and became confident we could do it securely. There were also issues around signing documents – we’re used to what we call “wet signatures” where the client signs the document in person, which of course was not possible during lockdown. The Law Society issued guidance on signing documents remotely, but this wasn’t available immediately as the situation was unprecedented.
Local authority searches were also delayed, mostly because personnel were unavailable. Hackney’s team closed completely at one point during lockdown, holding up all property sales in the borough.
Do you think the government will review the entire property taxation system, including stamp duty land tax, and what you foresee being the outcome?
It’s important to understand that the government is reviewing property taxation all the time. Stamp duty used to require one form that took five minutes. Now it’s a huge form. In fact, it’s got so complicated that some solicitors are outsourcing it to specially trained accountants. There are so many exemptions, not to mention the tier system, which makes it much complicated than it used to be.
However, if SDLT were simplified, the government would have to be very mindful of how they approach it. While things are a little different at the high end of the property market, regular homeowners would feel cheated if they had to pay SDLT when they sold their property as well as when they bought it – surely a vote-loser for the government.
As working remotely has slowed down the property sales process, is there merit in looking again at Home Information Packs, to bring together all the information in one place instead of having to approach separate organisations?
Yes, certainly in principle. Mortgage lenders certainly want to see that thorough checks have been made, and HIPs were helpful for buyers too. Buyers are apt to become bitter if they have shelled out for a survey which reveals a structural problem that prevents the property purchase cannot go ahead.
We’ve also seen some very expensive situations arise from sales being completed without all the proper surveys and forms in place (but that’s also why you should choose a reputable solicitor!). Some form of information pack would reduce this risk for buyers.
How can we speed up the home buying process?
Even though HIPs (home information packs) are no longer used, there’s nothing to stop the seller pulling together all the information anyway. They can create pdfs of all the key documents so that everything is in one place when the buyer’s solicitor requests it.
Have you seen a slow-down in property sales since the stamp duty holiday ended?
Not really. Although the stamp duty holiday is over, the pandemic has made many of us take stock and make some life decisions. We’re seeing lots of people choosing to move to the countryside, and choosing properties with more space for a home office, or with a garden.
Many people are reconsidering where they live and how much space they’ve got. Homeworking has also given people more options – for example, living forty miles away from London is a realistic option if I only have to be in the office three days a week.
Many thanks to James Singleton of Fletcher Day for sharing his insights with us! James is an experienced Commercial and Residential Property Lawyer – whether you’re buying or selling you could benefit from his extensive conveyancing experience.
To contact James, please get in touch with the Dockleys team on 020 3633 4440 and we will be happy to introduce you.