Stamp Duty Land Tax (SDLT) holiday announced – impact on homebuyers and sellers8th July 2020 - Published by
The headline: from midnight tonight until 31st March 2021, most people buying a home up to £500,000 in which to live will no longer pay SDLT, saving them up to £15,000.
According to Rightmove, the average house price in the North West is £206,909, which would equate to a saving of £1,638.
The housing market was effectively suspended when the Government announced lockdown on 23rd March. Since restrictions were lifted on 11th May, we at Kuits have so far seen activity increase to surpass that of the period before lockdown. House prices in the North West appear to be robust, although both Halifax and Nationwide have stated in their House Price Indices that house prices have dropped for the country as a whole.
SDLT holidays have been used before to support and boost housing market activity, and it is expected the effect will be the same this time – however the Government will also be hoping that the savings will feed into the wider economy through increased spending on home improvement, white goods and other so–called big ticket items.
Getting a mortgage may also become easier, as even though some lenders have tightened restrictions around how much they will lend to buyers, not having to pay SDLT may be factored into the calculations.
The downside to an SDLT holiday is that whilst it will boost both house prices and transaction levels for the duration of the holiday, it can lead to a fallow period once the holiday ends. The Chancellor will be hoping that the underlying economy will have recovered sufficiently to sustain the housing market if and when SDLT reverts to its current levels.
No steps have been taken to eliminate the SDLT surcharge on second properties, but investors and buy–to–let landlords will still benefit from the holiday, as they will only pay 3% SDLT on purchases up to £500,000.
In summary, the SDLT holiday is great news for everyone looking to buy or sell during this period.
We believe that the already buoyant housing market we are currently experiencing will be further boosted by the above measures. As a result, it will be important for buyers and sellers to choose a solicitor capable of dealing with the increased transaction levels to ensure theirs is processed quickly and smoothly. We at Kuits are preparing accordingly for such an increase.
To speak to a specialist residential property solicitor about an upcoming home sale or purchase, please call 0161 838 7874