Stamp Duty Has Been Extended
The Chancellor, Rishi Sunek’s decision to extend the Stamp Duty in early March had been widely anticipated.
The stamp duty holiday cut the bill on properties costing between £125,000 and £500,000 completely, as well reducing it on homes costing more than that but was due to end on 31 March.
Over the last year the tax break had led to a boom in transactions and prices, with official figures showing prices climbed by 8.5% in 2020.
Figures from Experian show that there were 12% more applications in February 2021 than in February 2020, however the chance of completing before the March 31st for these transactions is extremely low.
The Chancellor has announced the £500,000 nil rate Stamp Duty band will not end on 31st March; it will be extended until 30th June 2021.
Many in the industry felt that by simply extending the deadline, the Chancellor would have simply delayed the problem.
Sunak confirmed ‘to smooth the transition back to normal’ the nil rate band will be £250,000 until the end of September 2021.
Sami Bickford, Managing Director of The Mortgage Girl commented: “Mr Sunak had looked at the bottleneck in the conveyancing process and was aware that over 100,000 transactions that in normal times would have completed by 31st March had very little chance of completing in time. Many of these buyers may have pulled out of their purchases which could have proved catastrophic for the housing market.”
Although you have three months to benefit from the Stamp Duty holiday, it is critical you get started as soon as possible. The time it takes from application to completion can vary greatly depending on your situation and with the current pandemic causing delays all round in the housing market, significant delays can occur to mortgage applications at each stage of the process.