On July 8th 2020, in response to the Covid-19 pandemic, the Chancellor of the Exchequer, Rishi Sunak, announced that there was to be a ‘Stamp Duty Holiday’ – an increase in the stamp duty threshold for residential properties. The limit increased from £125,000 to £500,000.
Mr Sunak calculated that 90% of people would pay no stamp duty as a result and the effect on the housing market was profound.
Almost overnight the number of house sales and purchases soared and has maintained a high level ever since, putting huge strains on conveyancers, lenders and HM Land Registry.
The stamp duty holiday is due to end on the 31st March 2021 and many potential home buyers are very keen to complete before then. However, that is now very unlikely unless your purchase is well advanced as statistics show it takes a homebuyer an average of 123 days to purchase a home.*
With so many transactions in the pipeline and the chance of a delay pushing completion dates beyond the 31st March 2021, no one can now guarantee that a matter will complete in time in order to benefit from the stamp duty holiday. If making a saving on Stamp Duty was the main driving factor behind your desire to move then you should now be planning to either put your purchase on hold or ensure you can finance the “pre-holiday” amount of stamp duty.
If you were thinking of buying now to take advantage of the stamp duty holiday, but do not have an accepted offer already, the reality is that you have probably missed the boat.
The potential good news is that there is growing pressure on the Government to extend the holiday for a further 6 months. Whether this pressure will succeed is unclear – the Government had been asked to make an announcement before Christmas, but none was forthcoming.
For the time being make your plans on the basis that 31st March 2021 remains the end of the holiday.
For help and advice on conveyancing and completing your new home purchase, contact Hibberts conveyancing solicitors.