Target Group is warning the UK property and mortgage markets to be ‘stamp duty ready’ for the upcoming change to thresholds to avoid potential bottlenecks and maintain service levels.
Without the necessary preparation firms run the risk of current processes being overwhelmed and both delays and disappointment for clients and customers.
As first-time buyers and home movers rush to try and complete transactions before the end of March, a potential spike in activity is likely to put further pressure on firms.
Historically, so-called ‘cliff-edge’ deadlines and stamp duty ‘holidays’ have generated a surge in demand, increasing the workloads of brokers, lenders and conveyancers and creating operational backlogs in other parts of the chain – such as HM Land Registry.
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Target, a provider of digital transformation, software and business process outsourcing, is calling on the market to learn from these previous disruptions and ensure they are ready to meet demand.
The warning comes as both the Association of Mortgage Intermediaries and the Intermediary Mortgage Lenders Asocciation encourages its members to manage borrower expectations and prepare for a worst-case scenario should they miss the stamp duty cut-off.
REPUTATIONAL THREAT
Missing the deadline means higher costs for borrowers and presents a reputational threat for all parties, potentially damaging the relationship between lender and broker, and between a broker and their clients.
Melanie Spencer (main picture), sales and growth lead at Target, said: “Given how bloated transaction times have become, there’s every chance that those in the process or getting ready to move will have likely missed the boat.
“While a good broker will already be having this conversation with clients to manage expectations and make the necessary adjustments to budgets, it won’t stop buyers from trying.
“Firms absolutely need to prepare for a spike in activity and be ‘stamp duty ready’ before the new thresholds take effect.”
BATTLE SCARRED
And she added: “For those that remember the previous stamp duty holiday, the scars will still be very fresh. Arguably, many sectors are still recovering as workloads became unrealistic, client expectations were high, and people left the industry.
“To avoid something like this again, firms at every level need to be looking at their processes and their current systems to ensure they can keep pace if things escalate again.
“There’s no doubt technology will play a critical role, helping to drive efficiencies in mortgage application, lender decision-making and throughout the entire process to help facilitate transactions and minimise the burden on firms and their staff. Outsourcing key processes will be an asset too as firms look to avoid operational strain, maintain service and avoid reputational damage.”
