How the stamp duty holiday has impacted UK homebuyers
UK homebuyers seeking better access to digital services when purchasing properties
On 30th June 2021, the UK government’s stamp duty holiday – which gave buyers a tax break on the first £500,000 of their property’s value – was cut in half, giving buyers a tax break on the first £250,000 until October. While, there is no doubt that the government’s stamp duty holiday revitalised the UK housing market, we also saw thousands of homebuyers miss the June 30th deadline.
There is evidence that the outdated, manual practices used by some solicitors and estate agents are continuing to delay sales and surprise homebuyers who are seeking access to digital tools. The reality is that, while lockdowns and social distancing have encouraged many businesses to adopt dynamic online tools, elements of the property industry remain largely dependent on slower, traditional methods.
Homebuyers call for wider adoption of digital documentation tools
Since HM Land Registry made the historic decision to allow land deeds to be signed electronically for the first time last year, DocuSign has played a greater role in the UK property industry. As such, we wanted to understand how the end of the stamp duty holiday would impact homebuyers in the UK.
We surveyed 1,000 current homebuyers in the UK, alongside 150 estate agents and 150 solicitors in order to explore the experience of UK homebuyers and reveal the impact of the stamp duty holiday on the UK property industry.
The findings show that as many as 81% of UK homebuyers called for wider adoption of digital documentation tools by estate agents and solicitors. More than eight out of 10 (84%) said they wanted to sign legal documents electronically, 76% wanted entirely electronic contracts, 60% wanted online payments and 51% wanted the option to use electronic witnessing. Crucially, according to our research, 78% of UK homebuyers who have used digital documentation solutions said it made the buying process significantly smoother.
“The stamp duty holiday has energised the housing market – almost half of estate agents and solicitors across the country report year-on-year property market growth of between 10 and 50%,” said Matt Gibbons, Regional Vice President, EMEA Commercial Sales at DocuSign. “However, our findings also reveal that not everyone will end up profiting from the government scheme, despite their best efforts.”
HM Land Registry onboard with electronic signatures
Of the solicitors we surveyed, 57% said the reason they only accept ‘wet’ signatures is because ‘it’s accepted by HM Land Registry’. The good news is that the HMLR has been accepting electronically signed deeds since last July. Since then DocuSign has played a greater role in the UK property industry - executing the first ever HM Land Registry deed submitted electronically using our DocuSign eSignature platform.
We have been working closely with HM Land Registry and leading UK law firms to adapt our eWitness capability and develop enhancements that meet the specific needs of conveyancers, including two-factor authentication for both the signer and the witness. This work also led us to be named ‘Disruptive Technology of the Year’ at the Legal Week Innovation Awards.
How the industry is responding
Data from the property insight provider Search Acumen, shows that the number of property transactions registered in England and Wales increased by 26% in the first three months of the 2021. So it is little wonder that such a big conveyancing crunch exists.
But have professionals within the industry been doing everything they can to speed the process up? Our research reveals a patchy response.
With the impact of lockdowns making face-to-face dealings impossible, a surprisingly low number of solicitors offered digital documentation solutions to their clients. Despite 84% of homebuyers wanting to sign legal documents electronically, 51% of solicitors only accepted documents that have been signed manually with pen and paper.
Estate agents, on the other hand, were more aligned with the expectations of their clients: 83% already offer some form of electronic documentation service.
“This research signifies the start of an exciting new digital chapter for the property industry,” said Gibbons. “However, solicitors that choose not to adopt digital workflow tools risk losing business to those firms that do. House buyers will increasingly expect it as part of the overall service.”