The Property Market Could Benefit From Additional Time
Vendors and buyers are in a flurry trying to complete property transactions well in advance of the stamp duty holiday deadline – should this be extended?
When the Chancellor Rishi Sunak unveiled his plans to kickstart the property industry, it wasn’t just homebuyers, sellers and estate agents who benefited. The stamp duty holiday as well as the Help To Buy scheme extension also had a positive impact on mortgage brokers, conveyancing firms, surveyors and of course removal companies. Further down the line, properties changing hands also require locksmiths, carpet fitters, security system installers and even renovation firms. It’s fair to say that the government have certainly managed to kickstart various aspects of the economy with the stamp duty holiday. The problem is that this will come to an end on 31st March, 2021 – so should this be extended?
Surge In New Instructions
There have been significantly increased numbers of enquiries since the stamp duty holiday was announced in early July. Taking Kinleigh Folkard & Hayward as an example, this chain of estate agents has received a 80% increase in valuation requests and a whopping 86% surge in new-vendor instructions over the past six weeks.
All signs should point to this being enormously positive for the property industry as a whole. But the problem that we’re facing in early autumn, is that really you need to be on the market now and under offer within the next few weeks. This will ensure that your sale, and subsequent purchase, will go ahead and complete in time to take advantage of the window of opportunity before the stamp duty holiday expires.
A conveyancing firm in Essex explains that processes involved in your sale or purchase, such as the ordering of searches, are taking longer than usual due to the challenges of the pandemic. Therefore, you’ll need to get moving sooner rather than later to be certain that you don’t need to pay stamp duty. This pressure may cause sales and offers to start dropping off by around Christmas as people will assume they no longer have the time to rush their transaction through. If the government did choose to extend the stamp duty holiday, this will enable more people to keep the property market and related industries afloat for longer. Without this extension, the Centre for Economic and Business Research thinktank is predicting a house price collapse of 13.8% in 2021.
First Time Buyer Difficulties
90% and 95% mortgages aimed at first-time buyers have been shelved as lenders feel the pressures of the pandemic. Those who wish to get on the property ladder will have to acquire even more of a deposit to enable them to purchase a starter home, which is prohibitive for many. The stamp duty holiday was announced relatively early post-lockdown, which has given first-time buyers little time to scrabble around and come up with the additional money required for their deposit. Without first-time buyers being able to afford to make their move at this time, this will have an incredibly negative impact on vendors who are selling at the lower end of the property ladder.
Extending the stamp duty incentive for a few more months may not currently be on the cards, but with the government having completed a u-turn on several other major decisions, there’s every hope that this could change.