Stamp Duty Holiday
The re-opening of the housing market by the government in May, and then the stamp duty holiday announced at the start of July has, by all accounts, helped to ‘rescue’ a possibly already buoyant property market. I can only speak from my experience, but there does not seem to have been a slow in instructions during, or coming out of, the lockdown. Possibly quite the reverse.
We would usually expect a dip in the instructions over the summer months, as holidays tend to take precedent, but the pandemic we have found ourselves in has meant the usual trends don’t seem to fit anymore. Whether this is an effect of being trapped indoors or the enforced hiatus in the property market caused by the lockdown, the outcome is that agents are now seeing much more interest, with quicker sales being agreed. Add in the stamp duty holiday, and surely this is all good news for everyone. The question I have now is whether this will continue, or are we going to see the market effectively fall off a cliff come 1st April, once the stamp duty holiday has come to its end.
The benefits of the stamp duty holiday do seem to be taking hold, and its effects can be felt up and down chains. The question I got asked a lot when it was first announced was “Will that affect me?”. This answer, in short, is Yes. It affects everyone, from first time buyers to seasoned house movers. The change to statements for ongoing matters has, of course, been very welcomed and for new instructions perhaps an added incentive. Property prices, or perhaps more specifically agreed offers, seem to be positively affected as people’s budgets can take into account the lower stamp duty being due, and allow offers to be increased in line with the savings being received.
What will happen in March, or the run up to it at least, remains to be seen. Any matters instructed now should be well completed by the end of March, but as we get closer to the new year there is likely to be added pressure on chains to agree a completion date of March at the outset. Offers may even be made dependent on this.
Any matters still ongoing in March will need to ensure that completion has taken place by 31st. The stamp duty thresholds will revert to their original levels immediately on expiry of the holiday, and as the liability for stamp duty land tax kicks in on substantial performance, which is usually completion, it is completion itself which will need to have taken place. Unfortunately having an exchange of contracts alone will not be sufficient to ensure the lower levels of stamp duty are due. I, myself, am anticipating having to redraft and reissue contracts owing to revised offers if it looks like completion is going to go past 31st March 2021.
As with everything in this pandemic, it seems we will have to wait and see.
Here to Help
If you would like advice on the current Stamp Duty Holiday or conveyancing matters, please get in touch with Karen Fletcher.
Please note the contents of this blog are given for information only and must not be relied upon. Legal advice should always be sought in relation to specific circumstances.