Lawyers and estate agents working together. Isn’t the present climate bad enough?!
It is an old cliché joke, but there is a growing wave of change in the legal profession and with recent changes in the property industry (i.e. HIPS) there is plenty of scope for alliances to be made with lawyers.
Indeed, we are already working with Arscotts to provide our agents with a sophisticated conveyancing service and this is only the tip of the iceberg.
Our mortgage advisors (another service we offer our agents) have been in discussions with the lawyers (you can see where this is all heading) who are resurrecting the practice of stamp duty mitigation or stamp duty reduction or in simpler terms exploiting a loophole.
Now, I must confess to not fully understanding the entire procedure and I have a thousand questions. I hope to bring you more answers as soon as I get them, but the following gives a rough outline of the procedure.
If I am buying a property I form a relationship with a law firm, pay the deposit on my intended purchase and then sell the contract to a trusted partner (presumably for a nominal value).
This is where it gets a little confusing, the law firm apparently provides a bridging loan immediately prior to completion and the mortgage is then used to pay back the loan to the lawyers and by some legal jiggery pokery my stamp duty is reduced by 75% odd.
I have yet to be provided with the killer sentence or statement that explains ‘why’ and I haven’t the time or patience to read the stamp duty legislation and find out how this works and I am not sure this scheme is approved by the law society.
Of course there are legal fees and within the brief research I have conducted I have seen mention of legal fees of 25% of the stamp duty, which seems steep, but I guess they are taking the risk.
This also only appears to apply to property at the £1million mark, which again is one of the many questions that need clarification.
I have also read elsewhere that the revenue have 9 months to investigate such a transaction so it would probably be wise to actually keep the balance of the stamp duty just in case the dear old tax man changes his/her mind.
As I said, this raises a whole host of questions, but it proves the point that agents, lawyers and other advisors are slowly coming together to form packages for the end user.
There are a number of proactive law firms looking for partnerships with equally minded estate agents. These are opportunities for the future and ones agents should take. I have said before the entire industry is set for massive change and this is just one element of it. Niches are developing, partnerships are forming and the world is online. Agents cannot ignore these facts and if law firms can’t find equally minded innovative partners they will just go it alone. Indeed, the Solicitors Property Shop is already in this space.
I foresee the following: online agents with a sole advisor probably a law firm that will look after a client’s mortgage, conveyancing, HIPs etc etc. Very much a one stop shop with the agent as a specialist consultant and all conducted online.