Will Deals Collapse If Stamp Holiday Isn’t Extended?
At Prestige & Village, we are pleased to say we have helped many buyers and vendors at the tail end of 2020. The stamp duty holiday has caused many people to be active in the housing market.
Having the chance to save up to £15,000 is a great incentive, but with so much activity in the market, it is no surprise to see there is a backlog in the market.
So much so that there are genuine concerns that many property deals might not be concluded before the holiday is removed.
This could lead to significant problems.
There are calls for help in the market
The Guild of Property Professionals surveyed more than 1,000 buyers last week and 31% said they would ditch their potential purchase if completion takes them beyond 31 March, when the holiday is due to end.
Pressure is being placed on the Government to extend the stamp duty holiday, but as of yet, this hasn’t been confirmed.
There are growing concerns that tens of thousands of property deals across the country will collapse.
Leading names are looking for support in housing market
Iain McKenzie, CEO of The Guild of Property Professionals, commented: “If the deadline remains as it is, only a quarter of the sales agreed in January will complete in time. With 140,000 more people waiting to complete sales than this time last year, there will be a significant number of buyers who will have to find additional money for stamp duty if they have not budgeted for it. Our hope, and the hope of 71% of the public, was that the government was going to extend the stamp duty holiday, or at the very least, introduce a phasing out period that will ease the pressure on all parties involved, and will prevent a cliff edge.”
38% of respondents said that stamp duty payments have a big impact on the amount of money they pay when buying property, and 46% of respondents said it had a “medium impact” on their finances.
The research indicates the average value of property being bought, or which people intend to buy, stands at £232,500. This would relate to a stamp duty fee of £2,150. With so many people looking to push through their deal as quickly as possible, they might not have included these costs in their thinking.
Iain McKenzie said; “If buyers are unable to complete because of not having the stamp duty money in place, we will see a large number of transactions fall through as a result. In fact, our research showed 83% of those who had moved this year said they would have been likely to cancel or postpone their house move if they had to pay stamp duty, which would have been a disaster for the property industry getting back on its feet after the initial lockdown. The signs are there, the stamp duty holiday has been successful, but we need to ensure a smooth transition back to a normal service.”Back to blog