Chancellor Rishi Sunak’s announcement of a stamp duty holiday galvanised homebuyers into action.
According to country house agents in Bucks, his message has struck home. Last weekend they hardly had time to grab a sandwich.
Judging by the number of inquiries, the mood at breakfast tables in the Chilterns seems to be ‘if we’re going to move, let’s get on with it.”
On Wednesday last week the starting point for paying the tax on a house purchase was raised from the previous minimum house price of £125,000 to half a million.
The levy will revert to the previous rates on March 31 next year.
The incentive is intended as a window of opportunity to give homebuyers more cash in hand. The Government hopes buyers will spend the money on furnishings and improvements to the new place, thereby giving the wider economy a boost rather than using the windfall to buy a more expensive hereditament. The amount of stamp duty you pay when you move home rises in bands.
Under the revised rules, you won’t pay stamp duty on the first £500,000 of the price of the property.
From £500,001- £925,000, stamp duty is now five per cent.
On the portion from £925,001 - £1.5m, the tax will be ten per cent.
Above £1.5m: 12 per cent.
Buyers can save as much as £15,000 if they move before the previous stamp duty rates are re-instated next March.
Second steppers and those moving further up the property ladder stand to benefit most from this new type of “holiday”.
Under existing rules, those on the first rung of the property ladder have already qualified for tax relief if their future home cost less than £500,000. Buyers new to homeownership as of last week will benefit if the Stamp Duty Holiday frees up more starter homes resulting in greater choice. In theory everyone’s a winner.
Tim Hyatt, head of residential sales at Knight Frank said the temporary stamp duty cut was a shot in the arm for the property market and the wider economy. His colleague Oliver Knight in the agency’s research division added: “Clearly the Chancellor recognises the multiplier effect that moving house can have on the UK economy with more money spent on DIY projects and renovations.”
Chris Moorhouse at Savills’ Beaconsfield office received three offers for properties on the books last weekend. He told the bfp: “We’ve seen a dramatic upturn in offers and sales in the last few weeks. Inquiries and viewings are at an all-time high.”
Nick Pounce, his counterpart in the Amersham office, negotiated “at least five potential deals” last Saturday “with multiple bids in excess of the guide price ranging between £725,000 and £1.35m.”
Nick was keen to dispel any idea that the much hyped “pent-up demand” following two months of shut down could lead to a gravy-train for sellers. Realism is the route to making headway in the current market, says this agent.
As he sees it “the stamp duty changes have given buyers a saving and potentially a slightly bigger budget while vendors are now standing a little firmer on price – people appear to be keeping their feet on the ground when it comes to what they will pay, meaning sellers must retain realistic price expectations if momentum is to be sustained. The market is not falling over itself to pay over the odds.
“The biggest immediate challenge will be aligning buyer and seller expectations, particularly in locations where activity has picked up the most.”
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