Second Chance to Save in final phase of Stamp Duty Relief Holiday

As the market begins to cool following a mad scramble to beat the 30th June Stamp Duty deadline, those still in the house buying process may start to see processing timescales reduce.

In the lead up to the deadline, many lenders were experiencing such overwhelming levels of business with a reasonable chance of completion, that the service timescales for new enquiries slipped dramatically.


This is not, however, the end of the storm, as leading specialist broker Andy McBride explains.

“Undoubtedly many underwriters are breathing a huge sigh of relief now that there are not the same time constraints around completion that could potentially make or break a transaction. Enquiries now are generally being dealt with in similar timescales to that prior to June. This, however, could prove to be a false dawn as clients are aware of a similar deadline for the lower value transaction coming up in September.”

The Stamp Duty holiday was introduced by chancellor Rishi Sunak back in June of last year as a way of maintaining momentum and reigniting new enquiries amid the COVID-19 pandemic. In it, buyers faced no Stamp Duty liability on purchases of up to £500,000, until the deadline, originally March 2021 but extended ultimately to the end of June 2021.

Because of the levels of saving on offer, this naturally led to a huge demand from those buying to be able to complete prior to the deadline. From this date, the rate at which Stamp Duty would begin to kick in was reduced by half, to £250,000, meaning the buyer of a £400,000 property faced a liability of £7,500 post-June 30th, compared to nil if beating the deadline.

“Lenders were under severe pressure to complete in time in the run up to June 30th” adds McBride, director of Professional Contractor Mortgages. “Given the potential extra cost, there were many situations in which if they didn’t beat the deadline, they didn’t complete at all, as these extra thousands in tax were unable to be covered by already cash-strapped buyers during a pretty horrific economic period.”

While the end of the Stamp Duty holiday was well broadcast in the media, and was a hot topic within the property industry, many buyers are unaware that a similar, albeit lower, relief is still in place.

“The reduction of the level at which Stamp Duty kicks in is still temporarily higher than standard rates, and there is another deadline coming in September in which things return to standard levels” continues McBride. “Even with the disappointment of missing the June deadline, buyers can still save a considerable sum with the current level of relief. As advisers remind them of that, there is still a buzz amongst buyers now to save money and move in prior to the removal of relief altogether.”

Presently, no Stamp Duty is payable up to £250,000, with a 5% duty levied between £250,001 and the original relief limit of £500,000. This is still a benefit to buyers however, with the standard entry level of Stamp Duty in England set to return to its pre-pandemic level of £125,000 from 1st October 2021. This means someone buying the same £400,000 house can still save £2,500 by completing in September rather than October.

“While there may be a tinge of disappointment at potentially having missed the June deadline, buyers should remain active and aware of the possibility to save thousands by still continuing to purchase” concludes McBride. “It’s only natural that the potential to have saved many thousands having slipped by is a kick in the teeth, but don’t be blindsided to the fact that there is still a chance to save.”


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