UK homebuyers could face £1bn 'surprise' stamp duty bill

LaToya Harding
·Contributor
·3-min read
As many as 325,000 property sales agreed between September of this year and January could fail to complete before next year’s stamp duty holiday deadline of 31 March. Photo: Andrew Milligan/PA Images via Getty Images
As many as 325,000 property sales agreed between September of this year and January could fail to complete before next year’s stamp duty holiday deadline of 31 March. Photo: Andrew Milligan/PA Images via Getty Images

Brits looking to buy a home in the UK could be slapped with an unexpected £1bn ($1.33bn) stamp duty bill, it has been revealed.

According to the latest research by estate agency comparison site GetAgent.co.uk, as many as 325,000 property sales agreed between September of this year and January could fail to complete before next year’s stamp duty holiday deadline of 31 March.

This is due to the volume of sales currently stuck in the current market backlog as the housing industry battles to cope with huge levels of market activity seen in recent months. The holiday boosted a buying and selling frenzy at the end of the first lockdown, as stamp duty on all property up to £500,000 was removed.

GetAgent analysed the latest transaction data to assess how this will impact the markets in England and Northern Ireland. It pulled figures from all of the major portals which are then cross-referenced with the Land Registry using their proprietary algorithms and input from partner agents.

The figures showed that with England accounting for 97% of transactions, 315,534 sales could be impacted, while this drops to 9,466 in Northern Ireland. Source: Gov.uk
The figures showed that with England accounting for 97% of transactions, 315,534 sales could be impacted, while this drops to 9,466 in Northern Ireland. Source: Gov.uk

The figures showed that with England accounting for 97% of transactions, 315,534 sales could be impacted, while this drops to 9,466 in Northern Ireland.

With a current average house price of £261,795 across England, the 315,534 homebuyers who find themselves in property transaction limbo would pay no stamp duty as a result of the current holiday; only if they were to complete before next year’s March deadline.

The same applies for the 3,030 homebuyers waiting to complete in Northern Ireland with property prices currently averaging at £143,205.

However, with these sales expected to fail to complete before the deadline, homebuyers could be hit with a substantial stamp duty bill they weren’t expecting.

The total of this bill would come in at just under £975m in England, the data showed, and £3.45m in Northern Ireland.

READ MORE: UK house prices jump 7.3% as mortgage applications hit 12-year high

Colby Short, founder and chief executive of GetAgent.co.uk, said: “Although the current stamp duty holiday has worked wonders in terms of reviving the property market, it has also presented its own problems for the industry.

“Many buyers could find themselves hit with an unexpected stamp duty bill having already stretched that little further during the offer process under the intention they would be saving this sum.

“It’s yet a further warning to those looking to buy to not overstretch themselves financially, whether it be with the expectation of paying no stamp duty, taking advantage of low-interest rates, or otherwise.”

The end of the holiday may mean less activity in the housing market, and could mean a fall in prices.

The Office for Budget Responsibility (OBR) is currently predicting prices will fall 3.5% during 2021 – and will fall another 2.6% in 2022. However, if the economy is stalling in March 2021 this could be extended.

Watch: Why are house prices rising during a recession?