What will the SDLT hike mean for homebuying?

After months of heightened market activity with the upcoming Stamp Duty Land Tax (SDLT) hike triggering a rush to complete, there’s a niggling feeling among some of what goes up must come down.

The property industry has spent years grappling with the knock-on effects from outdated processes, reliance on manual administration, and delays in communication between all parties. As we edge closer to the deadline and a likely increase in fall throughs, these fragilities risk being laid bare in an uncomfortably high-profile way.

This month, the government announced its plans to digitise the homebuying process. Is the government also anticipating this outcome and getting ahead by laying the groundwork to meet it head-on with a solution?

After over 15 years of driving positive change in the industry and tackling inefficiencies by introducing technology that streamlines workflows, reduces friction, and speeds up key milestones, the prospect of this becoming commonplace is more than welcome.

While the government’s plans signal a step in the right direction, it does little to mitigate the immediate challenges facing many buyers and sellers racing to complete before 1st April. So, what does this mean for the market…

Market activity

Market fluctuations like what we’ve seen with SDLT aren’t new. We all remember the huge boost the Stamp Duty holiday brought to sales during Covid in 2020, with transactions from the year leading up to June 2021 increasing by 19%.* And that’s just one example.

These instances which cause heightened market activity will continue to happen. However, if the industry is better prepared to deal with them, it can take advantage of the huge opportunities they bring. With the planned move to digital processes, agents who haven’t already explored this will be wise to get ahead.

Looking beyond 1st April, we’ll likely see a mixed response from those who don’t complete on time. For those who were geared up to sell and still want it done quickly, we predict more shifts to Auction from chain-free vendors, to guarantee speed. While some will ride it out, and others will leave the market.

First-time buyer challenges

The disappointment post-SDLT deadline could sit largely with first-time buyers, who are hoping to enter the market in their droves according to Rightmove.
First-time buyers may not have known that Private Treaty completions can often take up to six months**, so for some their homeownership dreams were a stretch from the start. Disjointed conveyancing is often the reason for the holdup, which is why many agents are opting for our Premium Conveyancing service which uses tech to streamline the lengthy conveyancing processes.

There’s a lot of talk at the moment of affordability and market accessibility for these buyers, and SDLT savings will be particularly valuable to them in most cases, freeing up funds for everything else that comes with securing that first property.

Efficiency isn’t far away

As a sector, we’ve been looking for reform and significant support to make it happen. Fortunately, to ensure the target of modernising home buying is achieved, the government need only look to the Estate Agents who have already implemented methods to digitise.We work with 6,500 of them, so we know the government has a captive audience.

Change will not happen overnight, but the latest SDLT market stimulator and subsequent government intervention could be the catalyst to address process shortfalls and rally for improvements. A more modern, digitised process needs to become the moving experience that everyone gets, and we’d be eager to share our significant experience to make it happen.

To join our extensive network of Partner Agents here.

A version of this article originally appeared in The Negotiator; you can find it here.