The stamp duty holiday could be thrown into chaos for more than 50,000 homebuyers who are at risk of missing the deadline due to overwhelmed solicitors and mortgage lenders, Zoopla has warned.
Those hoping to buy a property without paying any of the tax have until June 30 to do so, provided their new home costs £500,000 or less. From July 1, only properties costing £250,000 or less will be eligible.
However, tens of thousands of buyers are currently at risk of losing out on the stamp duty holiday if their sales take longer than the standard three months to complete, according to Zoopla.
The property firm has warned that record numbers of homes being sold in recent months has heaped extreme pressure on officials involved in processing purchases – putting buyers at risk of having a delayed completion date.
Some 53,500 sales were agreed in England for properties ranging from £250,000 to £500,000 between March 8 and April 4, according to its research.
If these sales are delayed by just a few weeks past the standard three-month period from sale agreed to completion, those buyers will miss the June 30 deadline and therefore the maximum stamp duty holiday of £0 in tax.
Grainne Gilmore, Zoopla’s head of research, told The Sunday Telegraph: "High levels of activity in the housing market has put pressure on the second half of the sales process.
"Our data shows the time taken between listing a property for sale and agreeing a sale has fallen compared to the more ‘normal’ market conditions between 2017- 2019, by several weeks in some regions including the North East and North West.
"However the time taken to progress from sale agreed to sale complete is taking longer. This is because conveyancers, local authorities and mortgage lenders are trying to process record levels of sales."
Stamp Duty Holiday Explained
Ms Gilmore said the soaring sales are being driven by a "once-in-a-generation re-assessment" by the British public of where they want to live due to the work and home life upheaval caused by the Covid-19 pandemic.
This desire to make changes to where or how we live has been boosted further by the Government’s stamp duty holiday, she said.
Between July 1 and September 30, only properties costing £250,000 or less will be eligible for the maximum stamp duty holiday. From October 1, the nil band rate will return to the usual band of properties sold for £125,000 or less.
Rightmove, the property firm, has also warned that the conveyancing industry is "historically slow" and is struggling to cope with its increased workload.
Chris Ward, CEO of SDLT Compass, a tax specialist, said: “The entire legal industry is slow, methodical and precise, and for good reason.
"The stamp duty holiday has pushed it to its limits, as conveyancers frantically try and process the million plus people who have moved home in the last year.
"It is no easy job, especially right now, but there are technological solutions that can help speed up the process, and have the added benefit of covering the backs of ever-rising PI premium costs.”