The pressure to beat the stamp duty deadline on 31 March has ground some council search results to a halt, while other councils are severely delayed. In response, innovative lenders announced they will relax their rules. Here is an overview of the situation as it stands.
Overworked staff coping with huge caseloads, conveyancing costs, buyer anxiety and a looming deadline could have been catastrophic for the property industry. Instead, the rush to meet the 31 March deadline is inspiring innovative cooperation across the board.
Council searches overwhelmed
SearchFlow data confirms 20 councils face significant delays providing local authority search results. Standard timeframes are two to three weeks. Current timeframes range from 40 days to 180 days.
Some councils, such as York, announced they cannot process local authority search results. Others are facing additional challenges. In November 2020, Hackney Borough Council suffered a cyber attack, rendering it unable to provide information. Bedford Council has advised a turnaround time of 180 days.
These delays have stranded buyers in an administrative bottleneck. A range of industry experts offer stamp duty calculators, including up-to-date changes, for buyers to work out their options.
Innovative lenders keep industry moving
An innovative move from Skipton Building Society intends to keep the industry moving. The Society announced it would relax its usual rules and is permitting conveyancing indemnity insurance for council searches.
Alex Beavis, the head of mortgage products at Skipton, said the idea provides conveyancers with a viable option. The action intends to reduce pressure on stressed purchase chains, maintain market momentum and assist worried buyers in meeting the deadline.
NatWest, Barclays and Halifax are following Skipton’s move if conveyancers are happy to take on the extra risk. Santander and Nationwide have declined. To help buyers explore their options, government guidelines regarding stamp duty relief may offer options.
Brokers invite more lenders
The managing director of Prolific Mortgage Finance, Lea Karasavvas, detailed the conundrum facing the industry using Hackney council’s circumstances as an example.
Karasavvas explained that the standard purchase price in Hackney is over £500k. These buyers face an extra £15k stamp duty bill if they miss the deadline. Karasavvas echoed the call of brokers inviting more lenders to agree to the indemnity insurance, if legal counsel permits.
Brokers are including mortgage products for lenders who have agreed to the indemnity insurance. Buyers facing unprecedented delays are understandably worried about stamp duty implications, as well as indemnity insurance implications. A good starting point for understanding the unfolding situation is to review standard conveyancing costs https://www.samconveyancing.co.uk/news/conveyancing/conveyancing-costs-explained-3366 and work out options from there.
Potential hazard for buyers
Beth Rudolf, director of delivery for Conveyancing Associations, provided an example of potential risks facing buyers. Say a buyer assumes a loft conversion is safe to use as a bedroom but search results reveal its use was permissible for storage only. That’s why the ongoing situation is closely monitored by industry experts keen to protect everyone involved.