Stamp duty holiday deadline extended in Spring Budget

The government has today announced that the temporary stamp duty holiday in England and Northern Ireland has been extended until the end of June.

The news will hopefully come as a relief to those buyers and sellers who have been desperately trying to get their sale completed in time to meet the previous deadline of 31st March.

What is the temporary stamp duty holiday? 

The temporary stamp duty holiday, first announced by the government on 8th July last year, means that if you are buying a home up to the value of £500,000 you will not pay any stamp duty.

The extension means you now have until 30th June to complete on the purchase to make the stamp duty saving.

Then, to smooth the transition back to normal, the nil rate band will be £250,000, double its standard level, until the end of September.

It will return to the usual threshold of £125,000 on 1st October.

There hasn’t been any further update from Scotland on any extension to the Land & Buildings Transaction Tax (LBTT) holiday, which is currently due to end on 31st March 2021.

In Wales, temporary Land Transaction Tax reductions are also set to end on 31st March, but we’ll let you know if this changes.

Are there delays in the home-moving process right now? 

When the announcement was first made in July we recorded our busiest ever day on Rightmove, as people rushed to see if they could move home and make use of the savings, leading to a huge increase in the usual number of sales that would be going through the legal process.

We estimate that there are currently 628,000 sales going through, and this massive number, coupled with the challenges of conveyancers, solicitors and councils working from home, has led to delays in the home-buying process.

Our latest data shows that it is taking an average of 65 days from the time a seller has a property listed by an agent on Rightmove until they get an offer accepted, and a further 126 days to get through to legal completion, which is almost seven months.

But remember these are averages, and other factors such as if you are a cash buyer or if council searches in your area take longer will affected how long it takes.

What do the experts say?

Our resident property data expert Tim Bannister explained that the stamp duty holiday extension should give tens of thousands of home-movers the chance to complete before the new deadline.

He said: This three-month extension will come as a huge relief for those people who have been going through the sales process since last year and were always expecting to make use of the stamp duty savings.

“Our recent data shows one in five sales that were agreed in the same month the stamp duty holiday was first announced in July last year still haven’t completed, so this additional time will make a big difference to help those stuck in the logjam complete their purchase in time before the new end of June deadline.

“Buyers who have recently agreed a sale now have a race on their hands to see if they can also make use of the stamp duty savings, but many with purchases over £250,000 will find that time is too tight to complete before the end of June and so shouldn’t be factoring this into their purchase.

“It’s worth remembering that the average savings vary massively around England, and first-time buyers will still be exempt if they’re buying for £300,000 or less. There are also many other reasons people are choosing to move, evidenced by the strong buyer demand Rightmove has already seen in the first two months of the year.”

 

READ MORE: What does the Spring Budget mean for the property market?

READ MORE: How the mortgage guarantee scheme will help buyers with 5% deposits

 

The header image for this article comes courtesy of Kendrick Property Services.


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