Chancellor Rishi Sunak has now announced that the stamp duty holiday which could give millions of new home buyers a substantial tax break has been extended until . It was due to end on the 31st March 2021, however, with much criticism, petitions and worries about a housing market crisis – the discount is set to continue.
Those of you out there looking to buy a house up to the value of £500k can now do so without having to pay stamp duty – this means house buyers could see savings of up to £15,000. This extended discount will now be available in the UK until the end of September 2021.
It’s not just a great deal for first time buyers as this deal is available to all homeowners – this means landlords and property investors can take full advantage of the discount too. Now is also a great time to put your house on the market and get the desired value for it – some areas have even seen a slight increase in house value due to the stamp duty saving.
SInce the start of the scheme Rightmove have reported that more than 650,000 transactions are currently going through in the UK for property and house sales have increased by more than 60% since November of 2020 alone.
There is a substantial backlog in the next key steps of a buyer due to the sheer amount of property sales; working out the relevant mortgage agreements, valuations and conveyancing could have seen a house deal take a buyer past the holiday deadline for stamp duty.
The chancellor, Rich Sunak, was under a lot of pressure to extend the stamp duty deadline and the clock was ticking for many people to get the sale and transaction pushed through before it ended. In the meantime, several conveyancing companies were warning new customers to conclude that their contract would not obtain the stamp duty tax break.
Buyers and sellers should take advantage of the new deadline and try to close their deals as quickly as they can to get them signed off and completed by the end of September when the new deadline ends.
How Can You Purchase A Property Before The End of September 2021?
It has been advised that you must be as prepared as possible to give your property deal the best chances of scrapping the deadline. This means getting all the pending arrangements from relatives or friends with your mortgage lender, surveyor and any borrowings that might be arranged.
If you want to fast track through the process, a well-recommended and diligent solicitor is paramount. Ask all of your friends and family members or an estate agent; anyone you trust to have an impartial analysis for you. An estate agent can refer you to an in-house team; it may be worth hiring an independent mortgage broker in these circumstances to pursue any delays for you.
Enter a property deal without a chain, if possible, or as short as you can. It has been proposed that a Help to Buy to purchase a new-build home could increase your chances of meeting the March deadline. However, for seasoned investors, it’s not so simple as financial support may not be available, and then your best option to speed up the process is a chain-free or brand new home. Inevitably, expanded property chains slow the process down again.
Next, it’s time to update and get all your documents ready to go. If you are self-employed or freelance and have your bank statements to hand, you will need your proof of identity, payslips or audited account.
If you have yet to settle or submit an offer on a property, choosing and selecting your mortgage instead is your best course of action. You’ll find yourself in a much more advantageous position by obtaining a mortgage offer once you have found the correct property. It’s highly worth remembering that once a house offer has been accepted, it is estimated that it can take up to 12 weeks to complete the financing, surveys and conveyancing. This will help to speed up the process if a seller has already provided a seller’s kit.
Of course, it is vital to keep in regular touch with your estate agent and solicitor. Bear in mind, though, that too much chasing can be counterproductive. It is inevitably a hectic time for all conveyance groups, and piling too much pressure will only add to their burden.
What Happens If You Miss The Stamp Duty Deadline?
All you can do is hope to be paid off by your proactive actions and all the handwork of your lawyers and surveyors. There is no need to panic if you do end up missing the boat. There has been some speculation from experts that you may be better off waiting until after the stamp duty holiday.
The idea is that the market should cool off as the market quietens down. Yes, your tax bill will increase, but since there is less demand, you may be able to negotiate a better property price for yourself and instead make a saving here.
Will There Be A Stamp Duty Extension? Petition Hits 92,000 Signatures!
The petition seems to have worked – the initial deadline has now been extended. Three leading conveyance organisations called on Chancellor Rishi Sunak to prolong the existing holiday for stamp duty, which is due to expire at the end of March.
In November, the Society of Licensed Conveyancers (SLC), the Conveyancing Association (CA) and the Bold Legal Community (BLG), which together represent law firms that make the majority of home sales and transactions in England and Wales, wrote to the chancellor setting out a coherent case for the continuation of the SDLT holiday, or at least the implementation of a tapering scheme for its re-establishment.
The sending of that message, primarily due to Covid, accounts for the extremely difficult market conditions now prevailing and an even stronger case for intervention by the chancellor.
“The spike in coronavirus infections and the third lockdown have created ever-greater problems for home buyers and all the professions and industries serving them,” Simon Law, chairman of the SLC, said.
With property visits becoming more difficult, individuals needing to return to homework, consequent delays in searching for a property, mortgage deals, mortgage redemption estimates, leasehold details, property valuations, and progressive transactions have become a nightmare for transporters. Significant delays in the completion of home sales are unavoidable, and there is no guarantee that home buyers will complete the SDLT holiday by the March deadline.
The level of property market activity is good for the economy but, compounded by the effects of Coronavirus, has created a potentially very costly lottery for homebuyers in terms of benefiting from the SDLT holiday, commented Lloyd Davies, CA’s operations director.
Our phones are ringing off the hook with distressed customers concerned about their transactions being completed. Potentially catastrophic are the effects of home purchases costing thousands of pounds more than buyers have budgeted.
“It was clearly unacceptable for customers to maintain the existing expiry date of March 31st 2021 to withdraw the SDLT holiday.”
“Our members are seriously worried about the effects that the ‘cliff edge’ effect of the 31st March withdrawal of the SDLT benefit would have,” added Rob Hailstone, founder of the BLG.
Many of their customers say that if they do not complete their transactions by March 31st, they will withdraw, causing chains to fail and severely harming the property market. The effects would especially impact those involved in transactions that have to be relocated.
“By extending the SDLT holiday and introducing a tapering off of the scheme in the coming months. The impact and stress on people who are already struggling with the effects of Covid are entirely preventable.”
More than 92,000 signatures have now been drawn by a petition asking the government in Westminster to extend the stamp duty holiday until at least September 2021 – this has now been granted.
We’ll be keeping an eye on this, and we will update you with more information and an update closer to the end of the end of the extension. We hope you found this article useful.
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