On Wednesday 30th June, the Stamp Duty Land Tax holiday will start to phase out, with the threshold of £500,000 coming to an end.
Buyers Rushing to Complete Transactions
The Stamp Duty holiday has been saving people up to £15,000 on their housing purchases. The usual threshold is £125,000 but during the holiday, buyers have not had to pay any Stamp Duty at all on transactions up to £500,000.
After the deadline on 30th June 2021, this threshold will drop to £250,000 from 1st July, reducing the maximum savings of homebuyers from £15,000 to £2,500. In September, the threshold will return to its normal level of £125,000. However, first-time buyers will benefit from the threshold being slightly higher than £250,000 from 1st July; theirs will be £300,000.
The property market has been rather chaotic recently, with homebuyers going to extremes to secure a new house. Some of the shocking scenes include people queueing up outside estate agents’ offices over-night and many people buying properties without having a viewing first.
Chain of Sales in Danger
Some people are concerned that a large number of home purchases, including some that were agreed back in Spring, are in danger of falling through due to the fast-approaching deadline.
Buyers who have already borrowed their maximum amount may miss the deadline, meaning they could have no more funds to pay the extra amount required after the Stamp Duty threshold decreases on Thursday. This, in turn, means that they might have to pull out of the purchase, causing a knock-on effect which could break the chain of sales.
What Will The Property Market Look Like from July Onwards?
The start of July may see a bunch of price renegotiations between buyers and sellers if they missed the 30th of June deadline.
Since 1995, August has been consistently the busiest month for housing completions in England, though December was the busiest month last year because of the pandemic restrictions. This year, however, it is likely that March (when the Stamp Duty holiday was first scheduled to end) or June (when the Stamp Duty holiday was extended until) will be recorded as the busiest month for completions.
September sometimes sees a spike too due to the format of the academic year. Since records began 26 years ago, the university town of Oxford has seen the biggest percentage of completions in the third quarter of the calendar year. An average of 30.7% of completions come from Oxford between July and September. Furthermore, Cambridge is third on that list, with an average percentage of 29.9%.
Wosskow Brown Are On Top of Things
Here at Wosskow Brown, we’re completely up to date with all the purchases we are dealing with.
Anees Rehman, Assistant Head of Department of Residential Conveyancing at Wosskow Brown, says: “Our solicitors have been working hard together as a team to ensure that all our clients that can benefit from the £500,000 threshold have done so. We have invested in technology and additional team members to help us stay ahead.”
Jessica Gamble, Conveyancing Solicitor at our Gleadless Office, says: “The key thing we have thrived to do at Wosskow Brown is to meet clients’ expectations by providing realistic timescales and putting clients on notice from the outset of the cost of Stamp Duty if completion cannot take place prior to the 30th of June deadline.
“This was to ensure that clients still had funds available to enable them to proceed with their purchase and avoid them having to withdraw. The next threshold of £250,000 and £300,000 (for first time buyers) is still a healthy and realistic amount to enable clients to move. We suspect more sales and purchases will still go through even after the 30th of June deadline.”