Jane McGowan reports on how the recent announcement of a stamp duty holiday has impacted the property market.
According to property portal Rightmove, the British housing market is currently experiencing a ‘mini-boom’ with July asking prices achieving around 2.4% (+£7,640) more than March’s pre-lockdown figures.
Not only that but year-on-year buyer enquiries were up 75% for the month and of those properties listed since the English market opened in May, 44% have already been marked as sale agreed – a rise of 10% for the equivalent dates in 2019.
“The unexpected mini-boom continues to gather momentum,” says Miles Shipside, Rightmove director and housing market analyst. “The busy until interrupted spring market has now picked up where it left off and has been accelerated by both time-limited stamp duty holidays and by homeowners reappraising their homes and lifestyles because of the lockdown.”
In last month’s issue, several local agents reported that while the Covid-19 lockdown had proved challenging, the south-west London and Surrey markets were quick to bounce back, appealing to buyers keen to access its green space and rural routes.
And following Chancellor Rishi Sunak’s announcement that stamp duty on properties worth up to £500,000 would be temporarily suspended until March 2021, market growth seems set to carry on apace.
“There is a window of opportunity for sellers to come to market and to find a buyer who is tempted by the stamp duty savings,” explains Miles. “Although March may sound like a long time away, in reality, sellers need to find a buyer before Christmas, to allow a further three months for completion of the legal process to beat the deadline.”
But what do the changes actually mean for would-be purchasers?
Basically anyone who has completed a sale on the main residence (second homes are not included) between July 8 and March 31, 2021, will not be required to pay the government tax or stamp duty as it is known.
On a property worth £500,000, this amounts to saving of £15,000. Anyone looking to spend over that amount will only be taxed on anything over the threshold.
Previously stamp duty was paid on properties worth more than £125,000 with the exception of those being bought by first-time buyers, who could go spend up to £300,000 without being charged.
The current stamp duty holiday, which is aimed at helping those whose incomes have been hit by the pandemic, as well as boosting the property market, will replace the first-time buyer exemption.
“While most first-time buyers will not benefit from the stamp duty holiday, many will benefit from lenders now starting to bring back first-time buyer mortgages for up to 90% of the purchase,” says Miles. “Lower-deposit lending helps to boost buyer activity on the all-important first rung of the ladder, which in turn helps to boost the numbers of second steppers who are able to trade up, and so also enables others higher up the chain to move.”
Marc von Grundherr, director of London lettings and estate agent Benham and Reeves, is especially buoyed by the recent resurgence: “Prices are up, enquiries are through the roof and sales are being agreed like billy-o, and that’s even before the effects of the temporary stamp duty reprieve have had time to kick in. We’re in for a fast ride over the next few months and prices will rise further as a consequence of this unprecedented demand.”
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