Following the announcement made on 8 July this year by the Chancellor, there has been fervour in the housing market! Chancellor, Rishi Sunak has suspended stamp duty on main properties purchases costing £500,000 or less, in England and Northern Ireland. Nicknamed the ‘Stamp Duty Holiday’ the announcement was greeted by a frenzy on the housing market across the country, following the dark days of lockdown. Rightmove, the property portal reported that the number of houses selling within seven days of going on the market was up by 125% - the highest level in ten years. The speed that properties are currently selling within a week is one in seven.
The tax break that the Chancellor introduced on 8 July means that no stamp duty is payable on the property you are buying if it is your main home and is valued at £500,000 or less. Buyers purchasing main homes worth more than £500,001 but less than £925,000 will only have to pay stamp duty on the amount in excess of £500,000 and this will be payable at a rate of 5%. Any part of a purchase between £925,001 and £1.5 million will be taxed at a rate of 12%.
This is really positive news for house buyers as the average stamp duty bill will fall by £4,500 and those buying a property with a price tag of £500,000 will enjoy a whopping saving of £15,000 worth of stamp duty. Mr Sunak has suggested that nearly nine out of ten people buying a main home this year will pay no stamp duty at all.
In reality what this means is that a property of £300,000 will not be charged any stamp duty, which is usually £5,000. A property of £500,000 will incur no stamp duty, whereas a property of £600,000 would previously have been charged £20,000 and at the ‘holiday’ rate the charge will be £5,000 which is the charge made on the £1,000 above the £500,000 limit.
What the Experts Have Said
Nick Leeming, the chairman of Jackson-Stops, voiced his thoughts when the announcement was made and these were shared by many experts in the property sector and have proved an accurate prediction “Rishi Sunak’s stamp duty reform has come at the right time and will have an immediate impact on the volume of sales agreed in the coming weeks.”
Leeming has also forecast a buoyant autumn for the property market. “There should be a flurry of fresh buyers entering the market imminently, with the hope of completing their transactions before the tax break comes to an end.”
The Halifax too welcomed the tax break and said that it had been announced because "It was intended to boost a property market hit by lockdown", explained a spokesman from the Halifax, who also stated that the company had seen – "house prices fall for four months in a row".
Will the Stamp Duty Holiday Bring Other Bonuses?
Certainly giving everyone the stamp duty tax break is unlocking the property market and seeing many more transactions than normal taking place. It is also giving families flexibility meaning that they can move to areas with stronger employment markets, which in turn, will aid the country’s economic recovery.
Another bonus is that with extra money in their budget, householders will be spending more on removal services, new furniture, interior decoration and landscape gardening, which will help all these sectors to flourish once again.
Why So Many People Are Wanting to Buy/Sell
During the long months of lockdown with most families spending all their time at home, many discovered the short comings of their property – particularly lack of space and privacy. People living in flats found it a particularly difficult time and longed to have their own front door, garden and outdoor space.
For the first time, flats are proving not to be the most popular buy, but three bedroomed semi-detached houses with a garden are being snapped up. 20% of this type of property is being bought in the first week it appears on the market – compared with last year’s figure of 7%.
Are the House Prices Soaring?
House prices at present are increasing, modestly in some areas where there are a greater number of houses on sale, but there are larger price increases in areas where demand outstrips supply. This was in the Chancellor’s plan as he felt that the property market did need a good incentive to increase the number of transactions and to boost prices.
Nationwide told the BBC that - "August saw the highest monthly price rise in more than 16 years" and described the recovery of the property market as "unexpectedly rapid".
What Is All the Rush About?
Everyone wants to take advantage of the Chancellor’s generosity and to do this, their house purchase must be completed before the end of the stamp duty holiday on 31 March 2021. If the property being purchased is the person/ family’s main home, there will be no stamp duty to pay on it before this date.
Is There an Easy Way to Sell?
Often thoughts of the property selling procedure can be overwhelming especially if you are in a busy job that is trying to recover from lockdown. House hunting is made easier by the property portals and websites – especially those offering virtual tours of their properties as these can save hours of your precious time.
If you do decide that you would like to put your property on the market to take advantage of the ‘Stamp Duty Holiday’, House Buy Fast can definitely help. This free online service gives you a value quote for your property in moments and guarantees to buy your property for 100% cash, speedily and effortlessly – taking all the hassle out of property selling and leaving you to enjoy the tax break in your new home!