Stamp Duty Update

Following the Chancellor Rishi Sunak's budget announcement and our subsequent blog explaining the extension of the Stamp Duty holiday. This week we take a look at how the news has been received in the property industry and how this may affect the market in the coming months.

Many leading experts have welcomed the news and have identified the extension will help to prevent a sudden downfall in the property market which could have been catastrophic with the amount of purchasers withdrawing if they had failed to meet the initial 31 March deadline.

On the contrary the concern is that perhaps the Chancellor should have provided a tapering period from 31 March onwards instead of an additional 3 month extension. As many commentators and leading experts believe the extension is just delaying the inevitable until June and will add to the immense pressure and strain currently on those operating in the property sector. This has once again brought under scrutiny the home-moving process which is outdated and hardly suitable for the challenges an extension of the Stamp Duty holiday will provide. Many have gone as far as requesting a reform and upgrade to the home-moving process as a whole especially given the technology available in today’s world, but perhaps this is a long term goal.

Frequently Asked Questions...

• Will I incur Stamp Duty (SDLT) if my property purchase is not completed by the deadline?

Yes. From the end of June you won’t pay SDLT on the first £250,000 but you will on any remainder. This reduces to £125,000 from 1st October which was the standard SDLT nil rate band pre COVID.

• What should I do if I can no longer afford the cost of the property once Stamp Duty (SDLT) is added?

You should always factor in paying SDLT at the normal rate (not taking into account the current Stamp Duty holiday ) prior to making an offer. If however, you are caught out you could speak to your estate agent to see if you can renegotiate the price as Stamp Duty is non-negotiable

• Will I be liable for any costs if I pull out of a house purchase as a result of the SDLT holiday ending?

Possibly yes but only your own. You may have incurred mortgage or survey costs. Legal costs will depend on your arrangement with your solicitor. If you have any concerns, speak to your solicitor who will be able to help you

The Chancellor also announced that many big lenders will start offering 95% mortgages from next month in a bid to assist first time buyers on to the property ladder and push the governments initiative to turn ‘Generation Rent’ into ‘Generation Buy’.

All in all there is good news for the industry and we do expect to see the current boom in the property market to continue for the foreseeable future. As ever if you have any queries or concerns please feel free to reach out to our dedicated Conveyancing team at Ramsdens by telephone on 0808 1685 643 or by email on info@ramsdens.co.uk and we will be happy to assist.