Stamp duty break to boost the housing market
Last Wednesday the Government unveiled a new stamp duty holiday taking effect immediately and running until 31st March next year. As soon as the chancellor made the announcement, we saw a rush of people looking at our property websites with requests to view following closely behind.
What does this mean for buyers? Previously, they would have paid stamp duty on homes sold for at least £125,000, or if they were first-time buyers, on properties sold for more than £300,000.
Chancellor Rishi Sunak has now raised this threshold to £500,000. This means that nine out of 10 people buying a main home between now and the end of March will pay no stamp duty at all, and the average stamp duty bill will fall by £4,500.
Property website Rightmove have provided some statistics to help put the chancellor’s comments into context: There are over 510,000 properties that are under £500,000 on the portal in total, making up 81% of all properties for sale in England. Over 291,000 properties under £500,000 are currently available for sale on Rightmove, making up 78% of all properties available for sale in England – this means those have not yet found a buyer. Their chances and opportunities must therefore considerably increase.
Rightmove’s spokesman Miles Shipside said: “This move will help to keep the nation and wider economy moving because keeping the current momentum going will help prevent destabilising falls in property prices as unemployment grows and enable a quicker economic recovery.”
He continued: “Lockdown prevented 175,000 would be sellers from coming to market so we hope this Stamp Duty holiday will provide the spur for those missing movers to come to market. They will find there’s currently record demand for their properties from prospective buyers, with Rightmove enquiries to agents now double what they were before lockdown.”
Even before the stamp duty holiday kicked in there were strong signs the English property market was bouncing back. Since the government re-opened the property market last month, house-hunters have sprung into action and the country is on the move again. There are 40,000 new sales reported to have been agreed since the market resumed on 13th May, with buyers agreeing to pay 97.7% of asking prices on average.
Miles Shipside added that buyers hoping to negotiate hard may find their offer rejected in the current market. He said: “Following the initial shock of the early reopening of the housing market, England is getting moving again with a boom in traffic on Rightmove.”
He concluded: “There are no signs of panic selling or even a price dip. Some sellers who had agreed a sale before lockdown have been worrying that their buyer may try to re-negotiate with a reduced offer. On this evidence buyers may now be trying to exchange quickly, as there are signs of high pent-up demand and upwards price pressure, rather than downwards.”
Post lockdown activity in Wilsons has been gradually rising day by day, as more and more buyers and sellers emerge from their enforced three month hibernation. The announcement of the stamp duty holiday has resulted in the gradual rise of activity becoming a rush but please be assured we continue to follow the coronavirus precautions with the utmost care and consideration.