02 Jul Stamp Duty Summer Holiday
Stamp Duty Summer Holiday
This week stamp duty changed. The nil-rate threshold was reduced from £500,000 to £250,000 until the end of September. Around 1.3m buyers have taken advantage of the stamp duty holiday so far, saving an average of £5,034, and only a small minority of house hunters are expected to abandon plans if they miss the next deadline, according to Rightmove.
From 1 October, the threshold will return to £125,000 – or £300,000 for first-time buyers purchasing a property worth up to £500,000. Despite the rush to complete purchases before 30 June, around of third of buyers say they are expecting to take advantage of the deadline ending 30 September.
Lee Howard, Howard Mortgages says: “The stamp duty holiday initiative was designed to reboot the property market as there were fears that it would grind to a halt with the emergence of COVID. This worry was soon alleviated as the lockdowns that followed made people re-evaluate their home space, and in a lot of cases, also the location they could work from with home offices becoming more and more popular. This, added to the stamp duty holiday, increased the demand to move and complete before the deadlines, causing a house buying frenzy.”
“The draw of the Southwest is still very strong, and I don’t personally see house prices dropping back to their former levels any time soon. I am, however, expecting more properties to start to become available as many of the older generations are feeling more confident with moving now that the majority have had their second dose of the vaccine; Last-time sellers/buyers are just as important as first-time buyers in keeping a healthy property market. This should mean more housing stock is available and will hopefully start to cool off the rapid increase in prices that we have seen over the last 12 months.”
Since the introduction of the stamp duty holiday in July 2020, more than 170,000 extra transactions have taken place than would be expected in a normal 12-month period. Demand from homemovers outweighed the supply of new homes, with average UK asking prices up by £16,000 to £320,265 over the last 12 months.
Industry experts claim that it will be at least six to twelve months before the true impact on the property market is understood.
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