Budget Stamp Duty holiday extension likely to lead to more sustainable growth this summer, predicts Boys & Maughan head of residential property, Richard Durrant
Chancellor Rishi Sunak announced yesterday that the stamp duty holiday, which started last summer, has been extended for three months until 30 June 2021.
For property sales in England and Northern Ireland the current starting property value at which stamp duty is paid is £500,000.
After 30 June, the starting rate of stamp duty will be £250,000 until the end of September. Stamp duty will then return to the usual level of £125,000.
“This tapered holiday extension will be a relief to buyers and continue to incentivise clients completing their home moves as quickly as possible over the next six months,” says Richard Durrant, Partner and head of the residential property team at Boys & Maughan Solicitors.
“It will also mean that everyone involved in the property industry will remain extremely busy. Some specialists have found it impossible to deliver in the build-up to the previous 31 March deadline,” adds Richard.
“Despite the holiday extension, we are anticipating that our firm will continue to be incredibly busy this month because many people have arranged leave and booked their removal companies in readiness for an end of March move.
“It’s been both a pleasure and a relief that we are continuing to receive excellent client feedback, whilst our workload has increased by as much as 80% across some areas since last autumn.
“Some estate agents have said they are braced for a stampede of home buyers after the Chancellor’s holiday extension announcement. This is possible but we are also seeing our clients selling very quickly and signs that sale prices are starting to rise due to levels of demand, which could mean that we reach a point where there are too few buying choices for purchasers.
“More home moving activity will certainly be good for the East Kent economy. House moves create injections of cash and additional work for tradespeople such as carpet or kitchen fitters, for example.
“My prediction is that the combination of the savings to be made through the phased change to the stamp duty holiday and the continuing tide of people seeking a better life through a move to East Kent, weighed against increases in house prices, is likely to lead to steady rather than spectacular growth in the housing market over the next six months."
Richard concludes, “If my prediction of more sustainable growth is correct it will be welcome. At Boys & Maughan, we are planning to continue to focus on providing a premium service to our clients, maintaining staffing levels to meet demand and ensuring that we don’t overstretch our capabilities.”
The Chancellor also announced a new "mortgage guarantee" in the Budget. Starting in April, the Government will provide a guarantee to lenders who offer mortgages to people with a deposit of just 5% on homes with a value of up to £600,000. In the early days of the pandemic lenders pulled 95% mortgages, and many are currently still capping borrowing below 90%.