What Happens After Stamp Duty Holiday Ends?
As we’re beginning to see the end of the stamp duty holiday through a phased process, many people are wondering what will happen next. There have already been a couple of significant effects. However, it’s worth looking at the whole picture to predict what will happen to the market.
Buyers May Pull Out
At the end of June, the cap on the value on which stamp duty was waived dropped from £500,000 to £250,000. As this deadline approached, there was an apparent effect on the market. Buyers began to pull out as soon as it became clear that they weren’t going to make it in time for the deadline. Many did not have the budget for the extra £15,000, so they simply pulled out.
When the limit returns to its pre-pandemic level of £125,000, the same thing will likely happen again. As a result, many sales that aren’t going to complete in time are likely to fall through. This might leave some sellers high and dry for a little while.
New Buyers Emerging
A large number of sales fell through, and buyers pulled out. But, after a slight pause, new buyers stepped in. These buyers entered the market with the expectation of paying more stamp duty.
Some of the sales that went through were from buyers who had to pull out looking at different properties. But, encouragingly, many of the buyers were new to the market. That suggests that there is still a healthy demand for property even when taxes rise again.
A large number of new buyers are beginning a property search now. It’s unlikely that they will be able to benefit from the stamp duty holiday. Estate agents report that the number of new buyers that fall into this category is up on the five-year average. Not only are there people looking for new homes, but there is a good number of investment buyers as well.
There is no doubt that as we approach the deadline, there will once again be sales that fall through. As a result, the market is likely to slow and perhaps even pause for a short time.
The effects of the stamp duty holiday ending may take some time to sink in. It is reasonable to expect that house prices may drop a little in response. With that drop in prices, buyers looking now will be well-positioned to move in.
There still seems to be a significant demand for homes and investment properties. So once the market resets, it looks as if there may be some continuity. The boom may be nearing an end, but there are no indications of a coming crash either.
Looking To Put Your Property On The Market?
If you are looking to get a property onto the market, we can help you get all your assessments done. The most important thing you will need to complete is an EPC assessment. Remember that all properties listed for sale need to have an up-to-date Energy Performance Certificate before you can sell them. With this in mind, it’s a good idea to get that sorted as a priority, just in case there are any home improvements you need to make to boost its score so that it is more attractive to buyers.