As we approach the March Budget, speculation continues as to whether Rishi Sunak will extend the Stamp Duty holiday. The tax cut is due to end on 31 March.
Charlie Rearden of Stacks Property Search says, “The Stamp Duty holiday was intended as a stimulus for the property market, and many buyers were encouraged to enter the market as a result. They’ve been doing their best to get their transactions over the line in time to benefit, but there have been numerous delays to the buying process during lockdown, and many now risk missing the deadline.
“The most sensible solution for buyers and sellers who look as though they may miss the deadline is to come to an agreement to meet in the middle and share the financial fallout. Some vendors are taking a view, accepting that it’s worth taking a hit on the finance to get a sale over the line. But others are standing firm and refusing to negotiate.
“While some buyers will proceed whether or not they meet the deadline, others for whom finances are tight simply won’t be able to afford to. And the damage will extend up and down chains.
“In the event that there is no extension to the holiday, we will see some stock returning to the market as sales fall through. And increased stock represents opportunity for buyers. Our advice to new or frustrated buyers would be to stay close to the market at the end of March and into April, making sure you’re on top of what’s going on, speaking to agents regularly to make sure you’re aware of what’s coming back onto the market. There is likely to be something of a scrum this spring, so taking advantage of the fall out at an early stage could pay dividends.
“Buyers who can afford to proceed, despite missing the deadline, would be well advised to think hard before they collapse the deal. Supply isn’t matching demand, so don’t expect prices to fall when the stamp duty holiday comes to an end.”
Sara Ransom of Stacks Property Search in London says, “Extending the Stamp Duty deadline would certainly take the pressure off, but would be unlikely to boost the market dramatically. There’s a bottleneck due to solicitors, mortgage providers and other associated professionals having to work to deadline, and some buyers are trying to bring completion forward to build in some leeway.
“There’s genuine pent-up demand in the wider London market, but buyers have been reluctant to get into the market while the pandemic is in an extreme state. If things improve as expected, I fully expect the market in April to be strong, despite the end of the Stamp Duty holiday, so buyers who are already invested in a purchase would do well to see it through, whether or not they meet the deadline. There’s a view that the Stamp Duty saving has been factored into prices, so it’s arguable that there’s a falsely inflated idea of what’s being saved.”
Stacks Property Search, 01594 842880 / www.stacks.co.uk
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