2018: The Key Issues Facing Conveyancers
2018 is shaping up to be another challenging one in the UK property market and for conveyancers.
The continued negotiations over Brexit, potential further interest rate rises, changes to leasehold sales and the effects of the abolition of stamp duty for first-time buyers are among the key issues that will affect home buyers and sellers and, consequently, the legal teams involved in property transactions.
We take a look at six of the most important topics that will dominate the conveyancing landscape in 2018.
Stamp Duty Land Tax
We’re more than two months into the new Stamp Duty Land Tax regime where first-time buyers are exempt from paying stamp duty on properties worth up to £300,000 and on the first £300,000 of properties worth up to £500,000. The change has added further complexity to stamp duty with four different rates now applying to residential property transactions – for first-time buyers, home movers, second homes or buy-to-lets and limited company purchases.
A rise of 0.25 percent in the Bank of England base rate to 0.5 percent in November 2017 was the first rate rise in a decade, but many economists expect further rises in 2018. With the inevitable knock-on effect on mortgage interest rates, a large number of home buyers and movers are likely to be affected.
Disused mine shafts are a known issue across many parts of England and Wales and can be the cause of sinkholes – sudden large holes that appear in the ground – that can cause catastrophic damage to property. Recently lenders have refused to secure mortgages against properties close to mine shafts. Conveyancers have a duty to clients to carry out the most thorough investigation of a property and its environs. While a mining search is an optional one in conveyancing, Searches UK recommends commissioning a detailed search that covers the different types of mining that has been carried out in the UK; for example, coal and brine, tin and metal, limestone and bath stone.
Streamlining the buying and selling process
The Conveyancing Association has drawn up proposals to streamline and speed up the way property is bought and sold in a White Paper entitled Modernising The Home Moving Process. Among its suggestions are reducing the risk of fraud and money laundering through centralisation of how parties’ identities are verified and requiring a legal commitment to reduce the number of failed transactions. Along with Housing Secretary Sajid Javid’s commitment to housing reform and wholesale changes in leasehold practices, there could be significant changes ahead.
Digitisation, Bitcoin and blockchain technology
Technology may well be No.1 on many people’s lists of the key issues to watch in 2018. We’ve already seen the first purchase of UK property using Bitcoin, and blockchain encryption is being used to exchange contracts digitally. Meanwhile, the Land Registry is proceeding with its digital transformation, which includes a digital mortgage signature service. While none of these innovations are going to transform the conveyancing industry or systems overnight, they have the potential to be game-changers.
General Data Protection Regulations (GDPR)
On May 25, 2018, the new General Data Protection Regulations (GDPR) come into force. The first significant legislation affecting data privacy in more than two decades, the GDPR will introduce new protective measures for personal data, affecting how firms store client and employee data and how they can market their services. There will be severe financial penalties imposed for data breaches, so it’s crucial firms are taking steps now to ensure they’re compliant with the new legislation.
Kindly shared by Searches UK