With the stamp duty holiday set to end on 31 March, some home buyers are pushing to complete their purchases in order to benefit from a tax saving of up to £15,000.
The threshold for paying the tax was increased in July last year from £125,000 to £500,000 in England and Northern Ireland, in an attempt to galvanise the property market after it was forced to close during the first Covid-19 lockdown.
It means that the first £500,000 of any property purchase is exempt from stamp duty.
Buyers who complete on their property purchase before the stamp duty holiday ends could save themselves up to £15,000.
Previously, stamp duty kicked in at 2 per cent for purchases above £125,000, rising to 5 per cent for homes above £250,000.
Even those buying second homes or additional buy-to-let properties can benefit from the tax cut - although they still have to pay an additional 3 per cent on properties bought for more than £40,000.
However, time is running out as the property purchase needs to have completed by 31 March.
If you exchange contracts but don’t complete until after 31 March, then you will be required to pay the normal rate of stamp duty.
There is a chance that the tax could be extended, with MPs set to discuss the issue in an online debate on 1 February. This was triggered after 124,000 people signed a petition calling for an extension of the tax holiday until September.
But assuming that doesn't happen, some home buyers will still be looking for ways to complete before the deadline.
If you are in this position, you should consider whether rushing to complete by 31 March is really the best option - as house prices could fall after the extra demand caused by the stamp duty holiday falls away.
This could potentially result in savings equivalent to, or even greater than, the £15,000 that you may have benefited from under the terms of the stamp duty holiday.
However, it may still be in your best interests to complete by 31 March - for example if you have already had an offer accepted and are just waiting to complete.
This is Money asked Jeremy Leaf of Jeremy Leaf & Co estate agents, Abigail Fairley, legal counsel at online mortgage broker Habito, and Nick Smith, head of mortgages at TSB, for their tips on completing on your property purchase before April.
1) Buy a property which is chain-free
Leaf replies: The best advice I could give anyone still hoping to beat the stamp duty deadline would be to think very carefully about the type of property you buy and its location.
For instance, an empty, chain-free and preferably brand new, property with no onward chains should reduce your chances of missing out.
Some areas may be totally off-limits because there are serious delays with the conveyancing searches, which have no hope of being returned in time.
2) Get a solicitor lined up
Smith replies: Recommendations from friends and family, as well as your estate agent or mortgage broker, will give you a feel for which solicitors are likely to be the most responsive.
Bear in mind that there are potentially record numbers of house purchases to be completed, so many solicitors will already be extremely busy.
The stamp duty holiday applies to purchases completed from 8 July 2020 to 31 March 2021
As well as picking one with a good reputation, be proactive and ask them if they have the capacity to manage your purchase in the time-frame you want.
A good solicitor will get the applicable searches on your property moving almost straight away.
3) Get everyone on the same page
Fairley replies: If you’re in a chain, even small things that are out of your control could hold the process up for everybody.
If you’re banking on stamp duty holiday savings, have a chat with your estate agent before you commit to make sure everyone in the chain is on the same page about moving things along quickly.
4) Don't skip the survey
Smith replies: Chartered surveyors are likely to be very busy, so get a survey booked in as early as possible.
Remember, a lender’s survey is for them, not you - so it’s always wise to ensure you get a qualified person to take a proper look at the house you’re buying before you commit.
Don’t skip this stage just to save time. The saving you make on stamp duty could be far outweighed by the cost of repairs if you miss any major problems with the new house by skipping a survey.
5) Have your finances and documentation at the ready
Fairley replies: Make sure your deposit and any other funds are in an account that can be accessed as soon as it is needed.
Also make sure you have documents such as account statements or share certificates to back up where the money is coming from.
Your solicitor will need this documentary proof, so not having it ready will cause delays.
When your solicitor sends you documentation to sign, do it as soon as you possibly can
If any of your funds are a gift, your solicitor will need identification and proof of funds from whoever gifted it to you, so make sure you have this ready.
Throughout the process, your solicitor will also need some important documents from you. Sign, upload or answer anything they need so things keep moving forward.
For example, you’ll need to sign contracts and mortgage deeds so make sure you get these signed and returned as soon as possible, so there’s no delay.
6) Aim for a quick mortgage offer
Smith replies: If you’re using a mortgage broker, speak to them about which lenders are processing applications the quickest. It may be that the cheapest lender for your circumstances has a backlog of applications, and a small interest saving could be a false economy if they’re slow and you miss the stamp duty cut-off.
Mortgages can require a lot of paperwork - having your payslips and other evidence of income as proof of identity and address to hand could be a big time-saver.
Pay close attention to what you’re being asked to provide, as getting it wrong could easily set your application back a week.
Your lender will also value the property. In some instances, this could be an online ‘automated’ valuation, but in many cases, the lender will book a physical, internal valuation - make sure you impress the urgency on your estate agent, so that they can encourage the vendor to accept an appointment as quickly as possible.
7) Don’t relax when you exchange contracts
Fairley replies: There can be lots to do in the final stages between exchange of contracts and getting your new keys on the day of completion.
The house purchase has to be fully completed on or before 31 March for buyers to benefit.
Remember to pack, cancel your utilities and line them up for your new property.
If you’re buying a freehold, getting home insurance quotes lined up means you can arrange insurance easily once you exchange contracts.
Finally get quotes and availability from different removals companies in advance so you are ready to book them on exchange.
8) Don’t delay any further
Leaf replies: Even if you use a good mortgage broker, solicitor and surveyor with sufficient capacity there is still a chance your purchase will be delayed.
A considerable backlog has built up due to the demand for conveyancing, mortgages and surveys from others just as keen to complete before the deadline.
If an issue arises which requires negotiating or further investigation, it could easily derail your tight deadline.
Buyers do have a good chance of success, but the longer you wait before kicking off, the more you’ll need something that nobody has mentioned - luck.