Stamp Duty & Land Tax – Temporary Reduced Rates End Soon

A few months into the Coronavirus pandemic the housing market was looking particularly weak.  In order to try to boost the UK’s economy, the government increased the stamp duty thresholds, applying the change to first time buyers and those who already own a property.  For buyers purchasing homes up to the value of £500,000 this brought the Stamp Duty owed to £0, an obvious and valuable incentive to encourage people to keep the housing market moving.  This change is accompanied by a charge of between 3 and 15% against second-home purchases.

Despite the situation we found ourselves in in 2020 the housing market has been quite buoyant, with a month-on-month increase of 0.7%, and an increase of 5.4% in the year to October, with the average time taken to agree a sale down to 52 days as opposed to 67 days in the previous year, with mortgage approvals in November 2020 hitting a 13-year high.  However, although the time to agreement is smaller, the looming deadline means that the likelihood of completing by the 31 March is becoming increasingly problematic.  For this reason new-build developers are attracting buyers with the suggestion that purchasing a new-build is likely to complete much sooner than buying from a home owner who may well be part of a chain.

From 1 April, the rates will revert to as they were before the temporary reduction.