Special Feature: Covid and the stamp duty holiday: how will the property market move forward from here? – Bolt Burdon Solicitors
Melanie Carroll, of Bolt Burdon Solicitors, gives her thoughts on what’s happened and what’s to come after Covid and the stamp duty holiday.
Melanie Carroll, Partner and solicitor, Bolt Burdon Solicitors
Usually very confident in my property predictions, I have to say that the last year has blurred my crystal ball somewhat. If we’ve learnt one lesson during the last 15 months, it’s that life is inherently uncertain and unpredictable, with all plans and predictions thrown into disarray. On levels not witnessed before, we’ve seen disruptions across every aspect of daily life and business, and with the economy at a standstill, we feared the worst for the property market. But, for numerous reasons, including the Stamp Duty Holiday, the sector has thrived.
I’d like to be more forthright, but in all honesty, I can’t predict what happens next. My thoughts are based on the continued success of the vaccination programme, increased herd immunity, our scientists being proactive and nimble as against new variants, and no more lockdowns!
So, what is to come? As the stamp duty land tax (SDLT) holiday ends – albeit with taper relief in place until September – one thing is for certain, and that is that there has been no ‘cliff edge’. New business has slowed a little, but nothing of note.
There are countless factors contributing to what happens next, so I’m highlighting just a few of my thoughts and considerations.
Firstly, SDLT. The incentive to move before the end of September remains, and whilst I expect a slowdown in July and August (holiday lull), there will be an inevitable final “September surge”. Combined this with the anticipated “Christmas chaos” in December, there will be more exaggerated peaks and troughs in the final quarter months for 2021. Life will continue to be a rollercoaster!
Pricing is on everybody’s mind. My feeling (along with many others), is that the SDLT holiday has forced price inflation (quite unrealistically at times), but it’s interesting to note the amount of new ‘price reduced’ banners appearing against online listings, is this a sign of things to come?
At Bolt Burdon, we have had first-hand experience of price renegotiations, because of the failure of the chain to meet the SDLT deadline, in fact, I am sure we are not alone in witnessing one deal completely fall apart.
Prices fell 1.9% from March-April 2021, but were up 8.9% in the last year, and I think that prices will fluctuate a little over the coming months, but then stabilise. In addition, there will be regional and geographical variations for sure.
One issue that can’t be ignored is supply and demand. Remaining constant, through the months since Covid appeared, is the chronic housing shortage nationwide. Agents’ books are pretty bare right now, and I think it will take some time for them to be bursting with properties. There needs to be firm and unwavering commitment to house building. I think that this will come and expect more new homes to be built, and as a result we should see the new build sector on the ascendancy.
Of course, the overall economic situation influences the market. So, as ‘freedom’ day approaches, and office workers establish a ‘new normal’ (with many continuing to work from home, or trialling hybrid arrangements), I envisage a continued demand for outside space, home offices and less of a focus on proximity to stations. Greater freedoms at work, will enable greater flexibility at home. I don’t think we’ll see a mass migration to the coast or rural enclaves; more an extension to the conventional commuter zones.
Interest rates remain low and I anticipate this will continue – in the short term at least. Whilst money remains ‘cheap’ to borrow, there will be strong activity in the market. This said, the furlough scheme will shortly be coming to an end, and a rise in unemployment is a real concern, countering the aforementioned activity.
It’s clear that the pandemic has had a disastrous effect on pipelines, and that the average period from offer acceptance to completion has increased dramatically. In the 21st century, and with the technology available, this really shouldn’t be the case. I’m optimistic that lower volumes of work, and all stakeholders having made the adjustments necessary to deal with Covid, will have a positive effect – a win for everyone involved.
Dealing with lenders in the pandemic has been, both ‘varied’ and ‘interesting’! There have been some lenders who have really delivered in terms of service, but others, unfortunately not so! It is simply not acceptable to be on hold for hours, to speak to someone – nor is it acceptable to send mortgage offers by post only and not email. Time for lenders to step up I believe!
Sadly, I think we may see many good property lawyers call it a day. This is very sad, but there have been unbelievably tough conditions, and the mental health of property professionals has been stress tested to the absolute limit. Some people think that what we do is easy and to those, the phrase “come and have a go if you think you’re hard enough” comes to mind! Despite the advent of amazing technology, you are still all things to all people – not only do you need to be an expert in land law, but a confidante, a counsellor and, in some cases, a psychic… and all of this needs to be done yesterday. I hope (rather than predict) that the coming year will see some those working within the property industry looking out for each other more!
Another area I feel should be highlighted is fees. Lawyers have been lambasted for increasing their fees (even taking holiday) in the last year – both unjustly so. Firms need to be robust, stand firm and charge properly for the diligent, detailed and difficult work that they do. Ultimately, if we don’t respect and acknowledge the work we do, and be fair to ourselves in our pricing, then how can we expect anyone else to?
It has been a gruelling year, and there are many parts of it that I sincerely hope that I never have to repeat, but there have been great lessons learnt, changes (implemented reactively to the situation) to be kept in place, and continued adjustments to be made, to ensure we can ride out any turbulence to come.
On a final note, I’m not convinced you’ll find a real estate lawyer or anyone in conveyancing describe the last year as a ‘holiday’, the least appropriate term possible! So, to all real estate lawyers – well done, we did it!
Melanie Carroll heads up the Residential Real Estate team at Bolt Burdon solicitors. Partner and solicitor, Melanie has vast experience across the full spectrum of residential real estate work, having worked exclusively in this sector for over 20 years. She firmly believes in exceptional client care and continually looks for improvements and advances to deliver on this for both clients and her team. Bolt Burdon extends the same values as a business – providing outstanding service, efficiency and value. As a firm, Bolt Burdon combines technical legal expertise with a desire to exceed clients’ expectations 100% of the time. Every team member adds a personal touch to the legal process and looks for the most practical, solutions-driven approach. The firm prides itself on the ability to not just deal with the matter in hand but go above and beyond every time.
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