100k buyers set to miss Stamp Duty deadline

Olivia Heath
·3-min read
Photo credit: krzych-34 - Getty Images
Photo credit: krzych-34 - Getty Images

From House Beautiful

Around 100,000 homebuyers could miss out on the Stamp Duty tax saving, according to Rightmove, as the average time to complete a purchase is now over four months.

The latest Rightmove analysis shows that it is now taking 126 days from the time an offer is accepted until legal completion, which means buyers will face an unexpected tax bill as they miss the 31st March cut-off. The exception here is first-time buyers, who will still be mainly exempt after the March deadline has passed.

Of those already in the sales agreed pipeline, now at 613,000 according to Rightmove's latest count, around 100,000 will miss out on their Stamp Duty saving, the property experts project.

Additionally, research by Keller Williams UK has found that the current Stamp Duty Holiday has already saved homebuyers an estimated £817 million, with the potential to reach £1.5 billion before the March deadline.

The benefit of the current tax reprieve is abundantly clear, but with huge market backlogs and many homebuyers fearing they will miss out, Rightmove says seller flexibility to re-negotiate will be key to preventing some sales from falling through.

What is the Stamp Duty Holiday? Stamp Duty has been scrapped on all homes under £500,000 until 31st March 2021. This applies to all homes in England and Northern Ireland. This sees the Stamp Duty threshold rise from £125,000 to £500,000, saving buyers around £4,500.

Rob Houghton, CEO of reallymoving, also warns: 'As we head towards the end of the Stamp Duty holiday on 31st March sellers should prepare for an increase in gazundering, where buyers reduce their offer just prior to exchange. A large number of deals will be hinged on an assumed Stamp Duty saving and if they fail to complete in time, buyers will suddenly need to find a significant amount of cash – or renegotiate the price.'

Photo credit: fazon1 - Getty Images
Photo credit: fazon1 - Getty Images

However, the Stamp Duty Holiday isn't the only reason why there's been a surge in buyer demand. Notably, the first lockdown led to a desire for more space, a better environment and homes that were more fit for purpose, and this demand started a couple of months before the July introduction of the Stamp Duty Holiday.

'The Manchester suburbs, places such as Sale and Altrincham, are absolutely flying. People are looking for more outside space, and there's much more activity at the higher end of the market – i.e. properties being sold at £500,000 and over – compared to 12 or 18 months ago,' says Matthew Smith, Sales and Lettings Director at Thornley Groves in Manchester. 'Many people have outgrown their homes, and with more people now working from home, and undertaking home-schooling, it has really focused their attention on getting their properties ready to sell.

'Many home-movers are financially motivated, so the stamp duty holiday has definitely been a sweetener to kick people into action. Savings of up to £15,000 aren't to be sniffed at, but I don’t think the high levels of activity we're currently seeing are exclusively due to the tax holiday. It's simply given people the impetus to be alert to moving home, which in turn has led to more demand.'

Photo credit: Mats Silvan - Getty Images
Photo credit: Mats Silvan - Getty Images

Despite lockdown 3.0 in England, house moves are still allowed to go ahead, estate agents are still operating, and house viewings can be conducted (home-hunters are encouraged to start with an online viewing and shortlist properties before choosing which ones to go and see in person) as long as the government's COVID-19 safety guidelines are followed.

Visits to Rightmove are up by 33 per cent, the number of buyers contacting agents is up by 12 per cent, and the number of sales agreed is up by 9 per cent for January so far, compared to last year.

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