With the stamp duty holiday coming to an end on 31 March 2021, and the UK in another national lockdown, those buying or selling homes are rightly feeling antsy about the next stages of the sale.

After all, coronavirus has delayed a great many things last year.

But when it comes to property sales, there’s the possibility of a financial penalty worth perhaps tens of thousands of pounds if things are delayed.

Under normal conditions, when there is a lag between the date contracts are exchanged and completion (move in date), the buyer would put down a deposit that’s equivalent to 10% of the sale price and pay the rest on completion. You can also exchange contracts and complete on the same day, in which case the balance is due in one whack.

In the former case, if the buyer is unable to complete on the agreed date, a Notice to Complete can be served, after which the seller can apply to keep the deposit if the sale doesn’t go through.

For buyers, that’s obviously a big financial risk and some have lost years of savings because of this.

But because of the unprecedented effects of coronavirus, buyers and sellers can actually add a special Covid-19 clause to their contract before they exchange.

It means that should there be a delay, the completion date can be pushed back or the sale cancelled altogether without penalties on either side.

What it means for you…

If you’re currently in the process of buying a home, it’s certainly something to think about – it won’t be for everyone, and could make the process more expensive and time consuming, but it could offer some buyers more protection.

The clause would only apply in certain circumstances, and the delay must be triggered by the pandemic. Examples could include new government restrictions, if one party is hospitalised, a mortgage offer has been withdrawn after exchange or if the buyer or seller experiences a significant change in their financial position.

Obviously both parties will have to agree to the clause beforehand, and there may still be other associated costs if the sale doesn’t go through, such as the use of a surveyor or a solicitor. And to complicate things, the clause may need to be added all the way up the chain if there is one.

The Law Society has a handy guide (see the guidance for clients) that explains the ins and outs a bit more.

The next step would be to speak to your conveyancing solicitor – they would be able to advise whether it’s suitable for your particular circumstances and negotiate the terms.