As the 30th of June marked the end of the full stamp duty holiday, which will now be tapered until the end of September in order to smooth the transition back to the original rates.
Since last July until today, buyers have paid no stamp duty on the first £500,000 of property purchases in England and Northern Ireland. From today until 30 September 2021, tapering will mean that buyers don’t have to pay any stamp duty on the first £250,000 in the purchase of a residential property. The nil rate band will return to the standard amount of £125,000 on October 1, 2021.
Whilst some movers feel elated that they have managed to move during this period of ‘no stamp duty’, what it has actually created is a false economy, since the average house price in most areas has risen far beyond any saving made as a result of the stamp duty holiday.
If the cut in stamp duty has done one thing, it has provided a case study in inflation theory. That’s why, in my opinion, there is little point having a stamp duty ‘holiday’ which creates a time-limited effect but instead, the Chancellor should have made the cut permanent.
Of course, not everyone will have fallen victim to false economy. Some buyers will have agreed sales on homes already on the market – perhaps listed before the pandemic – and those who have decided to downsize will likely have fared well also.
So what will happen now? Will this overheated market settle down? According to the latest data by Rightmove, there are signs that things are cooling. The average asking price of property coming to market increased at a reduced rate of 0.8%, or £2,509, this month, although this is still the largest rise at this time of year since 2015.
Although prices are now at a record high in all regions in Britain, an all-time low in the number of available properties on agents’ books are starting to slow the market’s frenetic pace. The phasing out of the stamp duty holiday has diluted some of the urgency to move, yet buyer demand does remain strong.
It will be interesting to see the level of transactions that fall through over the next few weeks, where those who were relying on the stamp duty holiday fail to complete in time. There will be mortgage offers invalidated and a lot of very disappointed people. Even those that have budgeted for the eventuality that they may miss the deadline, do not have control over other buyers and sellers in the chain. Unfortunately, those that exchange on or before today [June 30], but complete after today’s deadline, will have missed the highest level of saving and will have to pay stamp duty on an additional £250,000. Conveyancers, solicitors and removal companies have been working around the clock to close as many deals as possible.
According to data from property website Rightmove published on 15 June, there were 704,000 sales going through the conveyancing process in Britain. This is over 275,000 more than the previous record of 428,633 set in May 2017.
While the process of selling a home has accelerated rapidly, the time to complete a transaction has only slowed down — with transactions now taking around 20 weeks.
If your buyer has pulled out and you still want to complete before the next deadline on 30 September, WeBuyProperty can buy your home for cash and complete in a matter of weeks. We will provide a no obligation valuation and guide you through the whole process – you can also save on agent fees!
Feel free to contact us today on 0207 449 9797 or email firstname.lastname@example.org