Homebuyers and sellers in England and Northern Ireland must act quickly to ensure property sales are complete before new stamp duty rules come into force next April. Bills for many buyers will increase, and solicitors and estate agents are expected to be especially busy in the new year in a rush to complete transactions.
“We’re likely to see a spike in demand, putting pressure on estate agents, solicitors and mortgage lenders alike,” says Andrew Boast of conveyancing company Sam Conveyancing.
Under the changes, movers will start paying the tax on any property over £125,000, down from £250,000 now. That means if you are buying for £266,000 – the average UK sale price according to Nationwide – you will pay £2,500 more.
First-time buyers will have to pay on homes worth more than £300,000. Currently that figure is £425,000 – and that higher threshold will only apply if the property costs £500,000 or less, rather than £625,000 now.
In London, the average price sits at £524,000, according to Nationwide. And since first-time buyers will have to pay the same as everyone else once the cost exceeds £500,000, they will pay £11,250 more than under the current regime. The Rightmove website has reported a rise in first-time buyers’ demand in London following the budget.
The change marks the end of special measures taken during Liz Truss’s 2022 mini-budget.
So how can you make sure a sale goes through smoothly and quickly?
For buyers
Have your finances in check when you put in an offer Having a mortgage in principle (MIP) will show sellers you are ready to move quickly, says Boast. It is not a binding agreement but will be helpful in a competitive market.
“Your final mortgage offer will depend on a full application and checks, and any changes in personal circumstances between the MIP and the final mortgage.”
If you are getting money from family, or have to sell off investments, understand the legal requirements so that the source of where the money comes from can be traced to comply with anti-money-laundering regulations, says Lorna du Sautoy of law firm BDB Pitmans.
“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,” she says. And tackle potential problems early, such as downloading bank statements and payslips to avoid delays if the sale starts to move quickly, says Justin Moy of EHF Mortgages.
Get searches done early Order conveyancing searches through your solicitor – they will tell you if there are any issues such as planning proposals, flood risks or water supply – as soon as the contracts come in from the seller, says Boast. Applying for fast-track searches can speed up the process by up to four weeks, says Zaid Patel, director at Highcastle Estates.
Book a survey as soon as you can “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,” Boast says.
Be ‘proceedable’ If you are not a cash buyer or chain-free, the next best thing is to have all your ducks in a row as early as possible, says Phil Spencer of advice site Move iQ. “Put your own property on the market at a realistic price,” he says. “Be pragmatic. Don’t choose a property you don’t love because it’s likely to be a quick sale. And don’t pay more than it is worth to you just because you want to complete before the Stamp Duty changes.”
If you need to sell, too
Price the sale competitively Getting the right price from the beginning is key, according to Paul Hardy of Newcastle-based LSL Property Services. He says that overpricing, and then reducing it later, can be counterproductive. “Those that undergo price reductions not only take longer to sell, but are statistically less likely to sell,” he says.
Pick the right estate agent A knowledgable local estate agent should be expected to put a realistic price on the home from their knowledge of the market and collected data. They will also clearly communicate with your solicitor, says Claire Langford, head of residential conveyancing at Roythornes Solicitors. “A smooth flow of information can help avoid any stress or delays, ensuring the transaction is as seamless as possible,” she says.
Be ready for the legal requirements Just as you need an estate agent who can communicate, you need a solicitor who can do the same. Look for referrals from friends and relatives, but also check they specialise in conveyancing or property law, says Helmut Elstner, managing director of The Mortgage Clinic.
Those approved by the Law Society’s Conveyancing Quality Scheme (CQS) will be skilled in residential sales, he says. Boast says that they should also be able to receive digital documents and handle your progress online to bypass any postal delays around Christmas.
Ensure documents, such as property information forms and EPC certificates, are in order. Du Sautoy says that if there has been work on the property, have planning and building control approvals, certificates and guarantees gathered together. “If you are selling a flat, order the management pack [containing the service charge and building management information] as soon as possible after putting the property on the market,” she says.
Set a deadline Tell everyone involved the completion date, which should be realistic. Property investor Abi Hookway says: “When the MOS [Memorandum of Sale] is sent from estate agent to solicitor, it needs to clearly state the date you’re working towards as this is then legally binding.” This should be no less than seven days ahead of the April changes deadline.
Pick the right type of buyer First-time buyers stand to lose the most from the stamp duty changes, so Elstner suggests they may be the most eager to finish the deal before then. He adds: “Given the time limits, cash buyers, or those with mortgage agreements in principle, can often proceed more rapidly. Buyers in lengthy chains should be avoided, as they may raise the possibility of delays or fall-throughs.”
