“Busiest six months in 57 years”: Stamp duty holiday sparks real estate pandemonium
The past week has been marked by chaos for buyers trying to exceed the stamp duty deadline, and long hours and stress for everyone else involved in the process.
This week, homebuyers were in a race against time to beat the deadline for the most generous holiday, which ended at midnight last night.
From today, the ‘zero rate’ stamp duty threshold will be halved to Â£ 250,000, down from Â£ 500,000 since last July.
The stamp duty holiday set the housing market on fire, pushing up house prices as buyers sought to take advantage of the tax holiday.
According to the latest Nationwide figures, house prices have seen the highest annual growth rate since November 2004, while figures from Halifax showed average property prices increased by Â£ 22,000 last year .
Those operating in the industry, from real estate agents to moving companies to transportation, have worked hard to try to accommodate their clients’ wishes and finish before the tax holiday ends.
Stephanie Boyce, president of the Bar, said a series of factors have come together to create the “perfect storm” for the housing market, and lawyers have worked tirelessly to get clients past the deadline.
“It is very stressful for those who wish to move,” she said, “[And] capacity is expanded at all levels – from local government research, to delays in mortgage offers to unforeseen setbacks further down the chain.
Unfortunately, she added, many people were at risk of seeing the deadline come and go without completing their purchase.
Kim Kaveh, a London-based personal finance writer and first-time buyer, was one of those who missed the deadline. A last minute issue involving a lost document prevented her from finishing her apartment until today – a mistake that will cost her around Â£ 8,000.
“I’m gutted. I’m so disappointed that through no fault of my own I have to shell out thousands of pounds that I hadn’t planned on spending to pay the stamp duty,” she said.
âI would have bought without the Stamp Holiday, but my decision was definitely rushed because I wanted to save money. It was a strong incentive to try to climb the ladder. Now the money this is going to cost me in stamp duties will mean that I cannot afford to furnish the apartment properly.
Charles Rickards, finance and marketing director of Aussie Man & Van, a London-based moving company, described how manic the market had been in the weeks leading up to the holidays, describing the weather as “phenomenally occupied “for moves.
“The stamp duty holiday, combined with low borrowing costs and a desire for more space, coincided with our busiest time of the year, and we didn’t stop,” he said. he declared.
âOur moving companies have been rocking; we are normally full two weeks in advance, but this has increased to four weeks and although we are working seven days a week, we cannot meet all the demand.
Despite the price spikes in response to the tax exemption, savings on stamp duty have proven to be a great incentive for those considering relocating. Simon Gerrard, managing director of north London-based Martyn Gerrard Estate Agents, said the past six months have been the busiest in the company’s 57-year history.
âThe level of activity that we have seen in many of our branches in the first six months of this year has not only eclipsed 2020, but has broken records,â he said, adding that the number of potential buyers registering with his company is still on the rise. more than 40 percent on pre-pandemic levels.
Chestertons CEO Guy Gittins said his business has seen three times as many buyers as usual this year, which has led to competitive bidding on homes, pushing real estate prices up. even higher.
There are signs that the manic market is slowing down. According to figures from RightMove, house prices rose only 0.8% in June, a more modest jump than the 1.8% increase in May or 2.1% in April.
Nonetheless, a situation “at the edge of the cliff” seems unlikely, real estate agent Gerrard said, adding that survey levels and sales agreed over the past month suggested that “all signs pointed to the rest of 2021 continuing to break records “.
He said the remaining tapered stamp leave would still persuade some people to relocate and save money on taxes, while the lifestyle changes brought on by the pandemic would continue to stimulate appetite in the market.
But Ross Counsell, a chartered surveyor and director of GoodMove, said the market would weaken from October.
âWe can expect to see a drop in demand starting in October once the deadline officially ends, and we expect this to be a better time to buy a property this year before rushing to try to meet the deadline.
âFor anyone looking to buy a property, the advice is simple: hang on the fire. If the statistics reflect anything over the past year, the stamp duty only benefits one side of the coin – the sellers. If buyers can wait until the end of the period, they should expect to save a significant amount of money on a property.