Since it was introduced in July last year, the stamp duty holiday has seen great success. Along with the release of pent-up demand following the first national lockdown, it motivated movers to return to the market. The savings afforded by the stamp duty tax break propelled buyers across the country to buy their next properties. Although this was great for the economy, the industry soon felt the strain. A logjam of cases soon built up, making it harder for purchases to reach completion. Particularly due to the pressure on local authorities with the influx of search requests, delays have been incurred. As a result, thousands of home-movers with transactions underway have been waiting with bated breath for an extension of the stamp duty holiday.
The stamp duty holiday has been extended!
Speaking at the Spring Budget meeting, the Chancellor confirmed the extension of the stamp duty holiday beyond the original deadline of 31st March 2021. In his address to Parliament, Rishi Sunak announced that the £500,000 nil-rate band will run until the end of June, granting a three-month extension. Subsequent tapering of this deadline will follow, where the nil-rate band will drop to £250,000 until 30th September 2021, twice the usual level. It will return to the standard level of £125,000 from 1st October 2021. With more time for purchases to complete, home-movers and industry professionals alike have welcomed the news.
How will the extension of the stamp duty holiday affect you?
With the extension now confirmed, thousands of homebuyers stand to benefit from the savings in land tax charges. A sense of relief has swept the market now there is more time for cases to complete. Although the market has slowed down enough to take a breath, demand is expected to rise again in the coming weeks. This is particularly true for London and the South East, following reports that buyers in these areas stand to benefit most. While movers should keep in mind that new cases are less likely to complete in time, even for the new deadline, the tapering will still bring crucial savings to many transactions.
Will the timeframes for local authority searches improve following the extension?
Local authority searches have been one of the biggest causes of delays for buyers during the conveyancing process. The influx of requests following the first national lockdown has seen many councils struggle to keep up with demand. Now, many councils are still reporting estimate turnaround times of several weeks longer than they would have been before the pandemic hit. Although the stamp duty holiday extension has been confirmed, there are no current signs as to how local authorities will be affected. As a result, numerous homebuyers are being encouraged to order their searches as soon as possible. Indemnity insurance policies can also be considered to help purchases move forward without the search results, where applicable.
What does the extension mean for the property market moving forward?
The extension of the stamp duty holiday has been widely well-received throughout the property industry. Many had concerns for a potential “cliff edge” in the market if the stamp duty holiday came to a hard deadline. However, the announcement of the tapering of the new deadline has helped to ease those concerns and the market is looking positive for the coming months.
How can Home Move Hub help?
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