Key property industry bodies have come together and sent another strong open letter to Chancellor requesting an extension to the current stamp duty land tax (SDLT) holiday due to the profession being under immense pressure and stress.
The Conveyancing Association joined the Society of Licensed Conveyancers and the Bold Legal Group to send a letter to Rishi Sunak, the Chancellor of the Exchequer in respect of the SDLT holiday.
Only at the end of last month, property sector industry bodies collaboratively came together and sent an open and frank letter to Chancellor Rishi Sunak, requesting a six month extension of SDLT holiday.
Since the announcement of the SDLT holiday on 8 July, there has been growing calls to extend the holiday as the property market experienced a mini-boom following the lifting of coronavirus restrictions, log jams appearing in the transaction pipeline and conveyancers under huge amounts of pressure to ensure that the transactions progress as smoothly as possible. Many feel that due to the current delays it’s nigh on impossible for many transactions to complete before the 31 March deadline, despite clients thinking that they’ve done all they need to in plenty of time.
A spokesperson for the Conveyancing Association said:
“We have not had the luxury of consulting with the members of our respective organisations as we were advised it was important to get the letter to Government before any final decisioning in respect of the one year Spending Review is made. However, we hope that members would largely support the content of the letter, but we would welcome all any feedback as always.
The outcome of the Spending Review will be publicised on 25th November, and it is important to note that should an extension or phasing out of the SDLT holiday not be announced, it doesn’t mean that the door is shut on a decision being made by Government to such effect.”
The letter said:
“We are aware that various organisations and bodies have already made representations to you in respect of issues associated with the SDLT ‘holiday’ coming to an end on 31st March 2021.
“The purpose of this letter is to set out for your consideration the challenges that law firms are currently having to deal with and the potential systemic impact that these challenges may have in the coming months. What we set out below is factual and dispassionate, albeit set against a profession and industry that is under enormous stress and pressure.
You will be aware that the housing market is currently experiencing transactional volumes not seen since prior to the recession in 2008/2009. The contributing factors are a backlog of transactions from the first lockdown, a newly generated demand to move caused by the fallout of Covid-19 and the lockdown (the race for space), and then the introduction of a time limited SDLT ‘holiday’.
“In normal times, the increased demand for conveyancing services would have stretched the capacity of the market to the limit. Set against the challenges of the current Covid-19 pandemic, conveyancers (and others) are close to being overwhelmed, in many respects due to circumstances beyond their control.”
The letter continues to itemise some of these circumstances which is suffocating the residential property market and said the end date of the SDLT holiday is “further exacerbating the situation”. The letter concludes that an extension to the SDLT holiday would have a “major calming effect on the market and provide the legal profession with some much needed breathing space”.
It further stipulated that if there was no extension “the alternative could lead to a degree of market failure by the Spring of next year with significant consequences to future transaction levels, house prices and the wider economy.” And urged the Chancellor to consider “an extension to the SDLT holiday (and or a gradual tapering off)”.
