Struggling conveyancing solicitors could face ruin if rumours of a dramatic increase in housing stamp duty materialise in the Labour Government's first budget on 2 July.
The Lawyer understands that Labour is considering increasing the current 1 per cent stamp duty to as high as 7 per cent.
In the past, any rise in stamp duty has had the effect of slowing down house sales, spelling bad news for many conveyancing lawyers, who increasingly rely on a high volume of transactions to make a living.
“It would kill the housing market stone dead,” said one senior conveyancing solicitor.
With many firms facing huge increases in their Solicitors Indemnity Fund contributions to meet a £454m shortfall, a loss of conveyancing work could take them to the brink of bankruptcy. Law Society property and commercial services committee member Anthony Bogan said any increase in stamp duty would be “absolutely foolish” with the UK having just emerged from a property recession.
Law Society research shows the conveyancing market is just getting back on its feet with the number of transactions in 1996 up 8 per cent on the previous year, although still down 41 per cent on their peak level in 1988.