Stamp duty land tax on a commercial property transaction has to reach HMRC within 14 days of completion, and the rates that apply are not the ones that apply to a home. Search Acumen, a property data firm, has launched a stamp duty submission process built specifically for commercial deals, connecting directly to HMRC and pre-populating the return from data already held on its platform.

Andrew Lloyd of Search Acumen on automating the 14-day SDLT deadline, what AI takes off a lawyer’s desk, and why he expects tokenisation to follow.

The Fintech Times put five written questions to Andrew Lloyd, managing director of Search Acumen and a founding member of the UK PropTech Association, on why commercial property has digitised more slowly than residential, what automation removes from a lawyer’s workload, and where he expects the technology to go next.

1. What problem does a dedicated SDLT submission process for commercial property actually solve, and who feels that pain most today?

Although it may seem counter-intuitive, SDLT rates are very different across commercial and residential property, so you can’t just use the same tools to complete both submissions. That is a challenge that often catches new entrants into the market by surprise.

Our tool is an industry first as a dedicated commercial property SDLT submissions solution, catered to this specific kind of post-completion work for lawyers. It connects directly to HMRC meaning the process can be completed entirely online and draws on data from across Search Acumen’s platform to pre-populate up to 70 per cent of the SDLT form, significantly reducing the likelihood of errors.

Time is also of the essence when it comes to submitting SDLT returns and payments to HMRC. You have just 14 days following the completion of the transaction to get this done, a real time crunch, especially for lawyers with many competing demands on their time. Our platform streamlines the whole process, end to end, so that it takes a matter of minutes, reducing the risk of errors and delays, leaving lawyers to focus on the more strategic side of their work.

The scale of commercial transactions is also often much larger, particularly in the ‘living sector’ with buyers managing large portfolios. Done manually, the SDLT process for each individual property becomes a huge time sink and, frankly, is rather tedious. Automating this process, or at least parts of it, allows lawyers to submit multiple properties on a single form using a dedicated merge tool and manage and monitor their submissions on a unified dashboard. The platform is already submitting 35,000 SDLT applications every month.

2. Why has commercial property lagged residential in digitising transactions, and what has changed to make this possible now?

It is true that digitisation has been slower in commercial property than residential. For one thing, commercial property transactions themselves often take longer to process due to the complexity, and compared with residential property, timing is less of an issue as investors can bide their time in a way that homebuyers can’t. Instead, for commercial transactions what can take precedence is the depth and accuracy of information to mitigate risk.

Having said that, since lockdown, we have witnessed notable delays in the AP1 process for commercial property transactions. A step that once took months is now often delayed for years. This can be particularly problematic when handling complex transactions as it’s hard to sell a property if the original ownership title has yet to make its way through the system.

This illustrates the scale of the challenge, but also why it is so vital that we move towards a more streamlined digital system. Primarily, increased recognition of AI’s potential to increase data quality and the value of fast and reliable access to centralised data have prompted a change in perspective. This tech is evolving at an incredible rate, and property is easily one of the most data rich sectors in the UK. As one of the earliest adopters and the first sole property data provider to integrate OpenAI for our customers, we are confident that we are operating on the cutting edge of its capabilities. We do expect greater uptake across the commercial property sector as dealmakers and lawyers become more alive to its potential.

3. What does this mean in practice for the lawyers and firms handling commercial deals: what disappears from their workload, and what stays?

Human intelligence will remain central to managing these transactions. Not only do lawyers bring with them a nuanced understanding of the law, but they are also able to navigate the relationships and emotional dynamics of these transactions. Where AI can lighten the load is often through lower value administrative activity that can benefit from automation, such as research and data handling.

For instance, in 2024, we launched Real Estate Intelligence (REI) as the UK’s first and at present sole AI-powered solution capable of extracting, categorising, and standardising data from local authority searches. There is a vast amount of data tied to each and every property in the UK, and without the assistance of AI, a lawyer or their support staff would have to dig out and collate this manually to ensure a successful transaction. AI takes this initial task off their plates and allows them to focus on getting the sale successfully and efficiently over the line.

4. How does better data flow through property transactions change risk, compliance and the speed of deals?

Disorganised data introduces a number of risks to a transaction. Comprehensive data, and confidence in the quality of that data, is absolutely essential to the success of a sale and purchase. Without it, everything from establishing the value of your property to completing the SDLT and AP1 submissions process is drastically slowed down. When a transaction is delayed, the likelihood that a buyer or seller will back out also increases and deals are in jeopardy of falling through.

Poor data flow is also a threat to cybersecurity, which can often be overlooked. Search Acumen’s conveyancing platform connects directly to HMRC and can be integrated with over 14 case management systems to ensure a direct, secure feed of data. One of the most underdiscussed risks is when firms dual source their technology providers over using just one end-to-end system. Opening up the possibility of spreading sensitive client data across multiple systems also means your firm’s cybersecurity is stretched thin. Duplication introduces an increased danger of a data breach and, as we have seen, when these occur it
can be both reputationally and financially devastating.

We have faith in the security and accuracy of our own AI tools, which are trained on high-quality data sets in the development phase. At the same time, we understand that lawyers will naturally want to insulate themselves and their clients against the risk of AI getting it wrong. With data, automated extraction reduces human error considerably whilst being around 80 per cent faster overall. Our confidence in our products means we can comfortably offer a wide range of professional indemnity and insurance solutions, a practice
which I believe should become the industry standard as AI is embraced at scale. Offering comprehensive PII is essentially us putting our money where our mouth is, proving to lawyers that they are protected against AI error just as much as human error.

5. Where does property transaction technology go next, and what should firms be preparing for?

At present, around half of all property transactions fall through before completion. In the UK, it now takes about four months to complete a sale, plenty of time for buyers or sellers to get cold feet and for gazumping or gazundering to ensue. It’s also effectively an anchor on our economy, one that we need to raise off the seafloor at a time when we are struggling to kickstart growth.

If we could speed up and streamline this process, it would be revolutionary for the residential property market, which is why I’m certain that tokenisation and blockchain will be central.

Tokenisation would see each property assigned a digital token containing all the necessary information to complete a mortgage or sale, functioning like a passport for property. I was involved in the very first trial of a blockchain residential property transaction in 2019, and it was incredibly exciting to see the transaction process cut down from three months to three weeks. Blockchain certainly has its own limitations, but it’s highly promising to see banks taking its potential seriously, with institutions like Barclays and HSBC involved in a remortgage pilot run by Great British Tokenised Deposits this summer.

Much like AI, allowing crypto tech to take on some of the work traditionally carried out by conveyancing lawyers should not be catastrophised. If the trials are successful and the tech continues to safely develop, it will simply change the way lawyers work, allowing them to prioritise focusing on more complex transactions. It won’t make them redundant any more than Excel spreadsheets destroyed the accountancy profession.

If firms want to more generally stay ahead of the game when it comes to legal and property tech, conducting a comprehensive audit of their current technology stacks to identify where they can optimise or streamline is a good starting point. This would allow them to both identify where AI and proptech can support their current operations, whilst also ensuring they are not spending more than they need on duplicated services.

The post Search Acumen: Why Commercial Property Digitised Last appeared first on The Fintech Times.