With housing transactions taking longer than normal to wrap up, find out how you can improve your chances of beating the stamp duty holiday deadline.
The average time it takes for a home sale to cross the line is now just under four months – around a fortnight longer than normal.
Most buyers who agreed a sale in 2020 would have expected to complete by 31 March 2021 under usual circumstances, according to our House Price Index.
However, the average time for an agreed sale to complete has surged from 90 days to 110-115 days.
Why are sales taking longer to complete?
The housing market was one of the bright spots of the economy last year, with 47% more sales agreed in the second half of the year than the same period in 2019. And this has led to a congested sales pipeline.
The stamp duty holiday, introduced last July, has boosted buyer appetite to move home.
The temporary tax break means that nearly nine out of 10 transactions are no longer subject to stamp duty, with the average bill falling by £4,500.
It’s set to run until 31 March, and with savings of up to £15,000 on offer, many buyers are now racing to beat the deadline.
The pandemic has prompted many people to carry out a once-in-a-lifetime re-evaluation of their home too, stimulating home moves and driving a search for space.
What does this mean if you’re hoping to take advantage of the stamp duty holiday?
There is a risk that up to 70,000 sales agreed in 2020 may miss the stamp duty holiday deadline, assuming a four-month completion period, according to our House Price Index.
What is not clear is how many buyers are dependent on the stamp duty holiday.
The more buyers rely on securing the tax break, the greater the risk of a spike in sales falling through if they don’t make the deadline.
If a stamp duty holiday extension fails to materialise, buyers across some housing chains may help to fund stamp duty costs for others in the chain to safeguard completions.
However, first-time buyers will still be able to make a saving after the deadline because under standard rules, they don’t pay any stamp duty on the first £300,000 on homes worth up to £500,000.
What can you do to improve your chances of securing the stamp duty holiday saving?
It’s all about getting prepared now to reduce potential delays.
From getting your paperwork in order, to setting realistic timelines, there are always ways to keep your keep your purchase on track. Check out our top tips for a smooth property transaction.
If you’re in a property chain, it’s also worth getting your head around how to manage them. Our guide on how to keep your property chain intact is a handy read.
Your conveyancer plays a key role in the buying process. Our 10-step guide shows you exactly what you’re paying for and how they can help you.
Finally, don’t let industry jargon trip you up. Look up terms you don’t understand in our property jargon buster.
Could the government extend the stamp duty holiday?
While the government will be keen to start raising tax revenues once again, the case for a short, month-long stamp duty extension is growing, to help buyers who agreed a sale in 2020 to complete.
Around 55% of sales agreed in January would complete by the end of March in a normal year – but the proportion this year is likely to be lower.
A petition calling for the stamp duty holiday to be extended has received more than 100,000 signatures, triggering a debate to be held in Parliament.
Responding on behalf of the government, financial secretary to the Treasury, Jesse Norman, said that he could not comment on tax policy outside of a fiscal event, such as a Budget.
He added: “The government will continue to listen carefully to representations from the industry and from those who are planning to buy or sell a property.”
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