What Does The Second Lockdown Mean For The Housing Industry?

The next lockdown which starts on 5th November and runs for four weeks has again raised challenges for solicitors. Uncertainty stemming from the Prime Minister’s briefing on the impact to the housing market has been addressed following a Tweet from the Housing Minister, Robert Jenrick, who clearly stated that during this next phase of lockdown that:

Construction sites can and should continue, Tradespeople will be able to enter homes,
Renters & homeowners will be able to move, Removal firms and estate agents can operate,
But all must follow the Covid safety guidance”,
 Of course we welcome this statement and
are relieved that it can remain business as usual for Estate Agents, Conveyancers and all
other industries that allow people to buy, sell and move homes.”

In a detailed article shared by The Law Society, it is clear that there is a housing boom with many people hoping to capitalise on the Stamp Duty Land Tax (SDLT) holiday which ends on 31st March 2021 and such a boom has both been a relief for the industry but also presented challenges due to the Covid protocols being implemented to ensure both clients and staff remain safe. Some of these challenges, as detailed by The Law Society, have been in relation to capacity and the implications of staff working from home or indeed being furloughed.

Here at Thornton Jones we are busy. Far busier than we expected given the challenges of the pandemic, however we have worked extremely hard to implement a system whereby we can not only cope, we can excel. We have put in place all of the necessary technology to enable effective home working and client interactions, we no longer have colleagues on furlough, and in fact we have been able to recruit additional team members; all of which means that we can continue to deliver the excellent service that we pride ourselves on.

That said, there are external factors at play that solicitors have little or no control over and these factors could result in delays in the exchange of contracts and completion of property sales and purchases. In the article from The Law Society they outline six points which is suggested that solicitors raise with clients.

The Law Society advise that solicitors may want to manage the expectations of their clients by discussing with them whether:

  1. they are aware that although you will do your best and liaise with others involved in the process to mitigate any hurdles, the speed of the transaction is outside your control and you cannot guarantee, even at this stage, that transactions will complete before 31 March 2021. This is especially the case where the transaction forms part of a chain.
  2. they are aware that the solicitor is often the last link in the move and it is only when the solicitor has all the pieces, which they are dependent on obtaining from others, that buyers and sellers can move.
  3. in addition to informing your client as to the reality of potential timescales at the outset, might it help to include a fallback clause in the contract setting an agreed purchase price should it become apparent that completion will not happen before the 31 March deadline?
  4. they still want to proceed if the SDLT concession is not available? Have you taken detailed instructions about this? If your clients do still want to go ahead, do they have the funds available to do so? If they are in a chain, they need to understand that even if they want to continue without the concession, others in the chain may not, which may mean that they will not be able to proceed in any event.
  5. they understand that if they exchange contracts but do not complete on the completion date, they may unwittingly become liable for SDLT. To mitigate against these you may need to develop some policies for your firm so that, for example, you will not agree completion dates of later than 20 March and will amend the Notice to Complete timings so that the period is reduced to no longer than 5 working days. Be extremely cautious about making ‘time of the essence’. Rights to terminate in circumstances need to be discussed with clients.
  6. their lender has imposed a condition in the offer that the transaction can only proceed provided that the SDLT concession is available?

Whilst much of the end to end process is out of the hands of a solicitor, here at thornton Jones we only want the best experience possible for our clients at what can be both an extremely exciting but stressful and emotional time. Our promise to you is that we will do our very best to ensure the transaction completes in good time, and if you are seeking to complete during the SDLT holiday then we will again be working hard to achieve this deadline. Not all matters will run to plan, and in some cases the deadline for the SDLT holiday may pass thus resulting in additional costs.

The Thornton Jones team are here to help in any way we can and during these challenging times we appreciate your patience and understanding.

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