The chancellor of the exchequer has today announced a radical & imaginative change to stamp duty. From today there will be a stamp duty holiday until 31st March 2021, on properties up to £500,000. Typically for buyers buying up to £250,000 that’s a saving of up to £2500 whilst if you are buying up to £500,000 you can expect to save as much as nearly £15000 . This is a massive incentive for people who are either in the process of buying a home or are considering the possibilities of purchasing. The idea is clearly to boost the property sector which contributes massively to the UK economy.
Recent research has suggested people who were considering moving before lockdown are largely inclined to still do so. These measures could well act as a tipping point which is clearly the intention. In truth the property market in the south Manchester area & into Cheshire has been buoyant since the government allowed activity to recommence 6 weeks ago. More supply is needed for the demand & hopefully that will also be achieved by the new stamp duty thresholds. The chancellor also announced a package of measures to encourage the employment of young people with a message that “jobs, jobs, jobs” is the name of the game.
Once again this is an intention to promote confidence in the economy & to reduce unemployment levels which had been suggested could escalate over 4 million taking us back to the worst of times last seen in the Great Depression of the 1920’s & thirties. As an industry we welcome todays news & our only concern is the beginning of next year there could be a degree of panic buying as purchasers push to get a completion before the deadline before the concession expires.
Given that a typical sale can take 2/3 months to complete & more besides when there are chains involved as sales are agreed in January there is a relatively small window of time to ensure you make the saving. In that sense, I can see a lot of conditional offers being made specifying that the offer only applies if the transaction completes before deadline day. Equally, as we then enter Springtime, a traditionally buoyant time of year, there may be a vacuum created as people hold back not just because stamp duty levels have resumed but also the implications of the worldwide pandemic & the forecasted recessionary period that is expected as a result. For now, though buyers can celebrate Stamp Beauty.
To find out more about the new guidance click here: https://www.gov.uk/guidance/stamp-duty-land-tax-temporary-reduced-rates
