InsightsInsight - Property and Conveyancing - POSTED: September 22 2020
Stamp Duty Land Tax holiday sees property market boom
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Two months after the government announced a temporary reduction in rates for Stamp Duty Land Tax (SDLT) on properties valued up to £500,000, reports show the market is booming.
On 8 July, in an attempt to keep the property market afloat post-lockdown, the government announced that the tax – commonly known as Stamp Duty – would not be payable on property values up to £500,000 until 31 March 2021 in England and Northern Ireland.
This effectively created a ‘holiday’ on the tax. In the space of an hour, buyers purchasing properties for £500,000 found they could now save themselves £15,000 in tax. SDLT continues to be chargeable on the usual rate above £500,000.
The effect on the property market
The property market was already starting to move after lockdown was lifted but following the Chancellor’s announcement, those in the property market saw almost an immediate effect. With the surge in interest, statistics show that sellers were seeing an increase in competition at the offer stage, with one-third of sellers receiving offers from three or more buyers. This in turn is translated into sellers receiving offers at asking price or just under.
Suffice to say the research is pointing to a strong market. According to Rightmove, more homes are selling within a week of going on the market than in anytime during the last 10 years. Recently, Nationwide reported that August saw the highest monthly rise in house prices in 16 years – further testament to the post-lockdown market boom.
Brachers Residential Property team has also seen an increase in the number of people looking to buy and sell, reporting a busier than usual two months.
With the SDLT holiday due to come to an end next year, we are expecting a rush of buyers wanting to complete before this. Experts are advising anybody wanting to take advantage of the tax saving, to secure an offer by Christmas, which will give them three months to complete before the deadline.
It remains to be seen if the end of the Coronavirus Job Retention Scheme – or furlough – on 31 October this year will have any effect on the property market.
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