Announced back in July as part of Chancellor Rishi Sunak’s ‘mini-budget’ the stamp duty holiday has been a key driving force in the housing market’s recovery. Yet with such a short holiday, at what point are buyers likely to miss out on this opportunity?
Let’s cut to the chase, it’s more than likely already passed and here’s why.
On average, a property transaction takes between 10 – 14 weeks. However, with such a large volume of transactions going through at the minute all aspects of a property transaction are taking longer than expected, from conveyancing and property valuations to mortgage lender approvals and local searches, inevitably this has caused a bottleneck.
This unlikely housing boom started when the UK’s lockdown restrictions began to ease in May when house buyers and sellers quickly flocked to the housing market. This pent up demand was then further bolstered by the Stamp Duty Holiday in July.
Zoopla recently reported that an ‘extra 140,000 buyers’ were in the queue to finalise their property move currently. That’s 50% more than this time last year and stated that those who don’t have an offer accepted pre-Christmas are unlikely to complete before March 31st 2021.
Previously, the market has been inundated with buyers but this hasn’t been equally matched with sellers. This demand has resulted in house prices increasing month on month meaning some buyers have been unable to afford a property they would have easily snapped up early 2020.
However, with sellers keen to move and the impending stamp duty holiday coming to an end, Rightmove stated the average price of property coming to market in November had dipped by 0.5%. Therefore, it suggests that sellers are keen to strategically price their property to see a quick sale. With buyer demand still strong, this is likely to see further agreed sales enter the queue.
The sheer volume of transactions going through at the moment has resulted in both conveyancing solicitors and estate agents calling for the government to re-evaluate how it cuts off buyers being able to take advantage of the stamp duty holiday. Some conveyancers have already warned new clients that they will pay stamp duty on their purchase as transactions are unlikely to be completed before the end of the holiday.
Unfortunately for some vendors, this could see a percentage of buyers walking away from a transaction partway through if they aren’t able to benefit from the stamp duty holiday. This is particularly worrying for those in a chain that could then collapse because of one party.
While some conveyancers offer a no move, no fee policy buyers should beware that there are still costs chargeable e.g. third party costs that are separate from conveyancer fees. Therefore regardless of whether your solicitor charges you or not, there will be costs incurred.
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