The stamp duty holiday unveiled by the Chancellor in July, has been credited with fuelling a mini-boom in the property market.
Latest figures from HMRC estimate that a total of 105,630 residential transactions took place this October, making it the busiest October recorded in at least a decade. The number of homes that changed hands in October 2020 was 9.8% higher than the previous month.
As buyers continue to rush to complete their purchases before the stamp duty holiday ends, over 100,000 additional house sales are expected during the first three months of 2021.
However, Property website Zoopla states that only half of the deals agreed in January are likely to complete before the stamp duty holiday deadline ends in March 2021.
The high demand for mortgages, alongside
Nationally representative research conducted by Stamp Duty specialists Cornerstone Tax, found that 18% of Brits – equalling over 2.1 million people – were only able to get on the property ladder as a first-time buyer because of the recent stamp duty holiday.
The research examines UK homebuyers’ sentiments on the confusing and ever-changing stamp duty land tax, and what they feel could be done to help.
18% of Brits have only been able to get on the property ladder as a first-time buyer because of the recent stamp duty holiday – 2,175,000 people
36% of Brits are mistrusting of the legal sector during property transactions and have felt ripped off by solicitors when buying and selling property – 9,608,000 people
13% of Brits say that as a homebuyer, they feel that they were forced to pay too much stamp duty in error due to their solicitor – 2,693,000 people
14% of Brits have been forced to take out short-term loans or emergency credit to cover the cost of unexpected stamp duty payments – 1,926,000 people
52% of Brits feel there should be an independent office set up that audits stamp duty transactions to ensure people pay the right amount and not too much – 18,456,000 people
David Hannah, Founder of Cornerstone Tax, discusses these findings:
“This research demonstrates just how important the stamp duty holiday has been for many first-time buyers, who wouldn’t have been able to get on to the property ladder without it. It also demonstrates a lack of clarity in and around stamp duty land tax, both by the public and legal sector. Although solicitors have a duty of care to inform their customers of all potential stamp duty reductions, many legal professionals are ill-equipped to navigate the complex rules around SDLT.
What is absolutely clear is that the government needs to review this stamp duty holiday, and either announce an extension or amend the tax payment date, so that homebuyers can still take advantage of the holiday even if they cannot complete by 31st March next year. The most preferable option would be a phasing out of the holiday, to avoid those who are currently in the process of purchasing their properties, essentially being thrown off a cliff-edge.
The government needs to do more to help get people get on the property ladder – government-backed purchase mortgage guarantees for borrowers would be a great way to reinstall confidence in the lending market. If the terms of these guarantees were for five years, for example, the inflation of the housing market during the medium term would wipe off any negative equity on those properties. This would give the market some security again, help buyers, and get the market moving again.”