Conveyancers could scupper last minute buy-to-let
Fleet Mortgages has raised fears that landlords seeking to complete purchases by 31 March could find they face an additional 3% stamp duty because conveyancing drags them over the deadline.
New measures announced by the Chancellor in November mean landlords purchasing buy-to-let properties from 1 April will face a 3% surcharge on the stamp duty they owe.
The deadline has prompted a surge of landlords looking to complete within the next couple of months in a bid to avoid the additional cost.
But Bob Young, chief executive of Fleet, said conveyancers without the right experience are likely to scupper their plans, costing them thousands of pounds more than they’ve budgeted for.
Young said: “At this time in the mortgage marketplace, the choice of conveyancing firm has never been so important.
“With the stamp duty deadline less than two and a half months’ away, there has been understandably a huge amount of interest from buy-to-let landlords wishing to purchase before the 3% increase kicks in.
“It’s a matter of fact that not all conveyancing firms are the same, and choosing the wrong one at this juncture will mean the client probably has no chance of hitting that deadline, which will leave everyone frustrated.”
Young suggested advisers should be actively recommending to clients those conveyancing firms who are prioritising buy-to-let and second home transactions.
His recommendation followed a recent announcement by Goldsmith Williams which said it has made extra resources available for such cases, urging advisers and their clients to instruct as soon as the mortgage application is submitted.
The law firm said it will be able to save clients “weeks of time” by submitting the local search request upon receipt of the contract documents from the seller’s solicitors, starting work on the contract documents as soon as they are received, even if this is pre-offer.
Fleet Mortgages believes more specialist conveyancing firms will need to prioritise cases in a similar way in order to ensure clients complete on time.
It also said that in specialist cases, such as where buy-to-let landlords are purchasing through a limited company, advisers and clients would need to instruct specialist conveyancers with the necessary skills, experience and expertise in this area.
It urged advisers to talk to lenders active in these sectors in order to find out which conveyancing firms would be best placed to take on such cases.
Young added: “There are can be no guarantees the transaction will complete as there is much that can cause delays and many prospective purchasers will be in very long chains.
“However, what you want from a conveyancing firm at this time is an understanding they are fully aware of the time pressures, they have the necessary resource to deal with the work and its requirements, and they are going to do everything they can in order to make it happen.”