After a turbulent 2020, there is much hope pinned on 2021 to be a better year. Yet, from a conveyancing business perspective, 2020 wasn’t a terrible year. The housing market got off to a positive start, with the Boris Bounce, after the Dec’19 election. Although the market did grind to a temporary halt with the first lockdown, as a result of pent-up demand and the stamp duty holiday the industry saw a record number of transactions in the second half of the year.
With an unusually buoyant housing market amid a recession and global pandemic, what could 2021 look like in the world of conveyancing?
For the first quarter of the year, conveyancing and property solicitor firms will very much be dedicated to completing as many transactions as possible ahead of the stamp duty holiday deadline at the end of March.
The conveyancing industry has seen unprecedented transaction numbers since the holiday was announced last year, July 2020. Yet, there are deep concerns the housing market will drop off a cliff edge come April and so far the government has declined to extend the tax relief despite ongoing industry efforts.
What the industry does expect to see is more support from the government and mortgage lenders in getting First-Time Buyers (FTBs) onto the property ladder.
While second stepper house buyers or those looking to upsize have benefitted from historically low-interest rates and the stamp duty holiday, first-time buyers have been the worst off since the pandemic hit.
Most low-deposit mortgages were quickly removed from the market when England went into its first lockdown. Furthermore, the stamp duty holiday had no bearing of significance due to FTBs already having access to not having to pay stamp duty under the threshold of £300,000.
The good news is that once the stamp duty holiday ends FTBs will continue to not pay SDLT on a property purchase up to £300,000 and only 5% SDLT on the portion from £300,001 to £500,000. It’s also been reported that more low-deposit mortgages are coming back onto the market. While the government’s latest Help To Buy: Equity Loan scheme is only available for FTBs.
With more options on the table for FTBs, it is hoped this will stimulate more activity from this previously neglected segment of the property buying market.
Adopting a more digitalised approach is also high on the agenda for 2021. There have been slow movements to enable the conveyancing process to become more digitalised. Yet, since the global pandemic, there has been a big push behind digital technology to improve and streamline some of a conveyancer’s day-to-day workload.
Most recently announced is a new technology to improve identity verification in the residential home buying and selling process, using a digital identity trust scheme.
The project will enable consumers to use one digital identity when buying or selling a home and share this with other relying parties such as estate agents, conveyancers, mortgage intermediaries and mortgage lenders, within a scheme framework.
Stephen Ward, Council for Licensed Conveyancers, recently noted: “Of course this extraordinary year has sped up adoption of new lawtech, especially around ID and we expect that will continue and that we will see more improving and streamlining of services as more and more firms begin to offer digitised services to clients. That’s likely to grow and to also expand as we see the digitisation of the Land Registry.”
While the UK gave a huge sigh of relief when the PM announced they’d reached a post-Brexit trade deal, it’s uncertain how this will affect the UK’s economy moving forward. With some economists suggesting this may well not happen until 2022. A slower recovery could impact the housing market so only time will tell how the industry fairs.
However the year pans out, here at Enact Conveyancing we’re dedicated to offering the best possible service to new as well as existing clients. We look forward to the year ahead in the knowledge that anything can happen in the housing market. With any dip, we see there will be a bounce back.