Leading up to the end of the first Stamp Duty Holiday, we started to see some cooling in the market, with Rightmove announcing that, while prices were still rising, they were doing so at a slower pace than in previous months. Additionally, the number of properties available on estate agent’s books were at an all-time low.
While debate continue to abound about how the market will react to the end of the tax relief on purchases, research carried out by Savills shows that only 5% of purchasers will consider abandoning plans to buy a property if they miss the June deadline. Additionally, 71% of those currently in the purchase process do not expect to complete ahead of the stamp duty holiday deadline anyway. Clearly the potential stamp duty saving was not the only factor in their decision-making process, according to the survey of around 750 Savills buyers.
However, with supply starting to slow and a battle to gain instructions, it’s more vital than ever that agents provide clear and meaningful communications with potential vendors and buyers to support the momentum that has been driven over the past 12 months.
How buyers are affected by the end of the stamp duty holiday
While the full discount on up to £500,000 ended on 30th June 2021, the additional grace period on properties up to £250,000 until 30th September means that buyers can still benefit from 2% relief on Stamp Duty Land Tax.
On a practical note, for a property priced at the current UK average of £268,000 (ONS), the difference in tax due before the holiday ends, during the period up to October, and once the relief is removed is as follows:
SDLT Due – up to 30th June – £0
SDLT Due – Between 1st July – 30th September – £900
SDLT Due – After 1st October – £3400
For many buyers, the actual financial burden of stamp duty will be minimal. In addition, with more low deposit mortgages available than in previous years, upfront costs for a property purchase are still lower than we have seen in past years, despite rising property prices.
Communication is key
With headlines across the mainstream media announcing the end of the holiday, rushes to complete, and general chaos around conveyancing, it’s unsurprising that both buyers and sellers alike have felt the pressure to make a move before the relief ends.
However, agents are in an excellent position to dispel the fear around the future and reassure both vendors and purchasers alike that, for those who want to move, it’s still a good time to do so.
Since lockdown, buyer priorities have changed. People are working more flexibly, want more outside space and are looking further afield to get what they want. And these preferences are unlikely to be set aside down to upfront costs.
Our clients are seeing success with clear communication plans which outline what the end of the Stamp Duty Holiday means in real terms and continue to promote the benefits of their services and spotlight properties that meet buyer needs.
While the end of the Stamp Duty Holiday will no doubt have a small and short-term impact on the market, agents who continue to make the best use of their database and provide valuable content are likely to be the long-term winners.
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