The stamp duty holiday offered a welcome stimulus to the sales market during 2020, however, nationwide there is concern that a sharp cut off on 31 March could see a huge amount of transactions fall through.
Alex Turnbull is head of client services at Estate Agents Douglas & Gordon
The stamp duty holiday offered a welcome stimulus to the sales market during 2020, however, nationwide there is concern that a sharp cut off on 31 March could see a huge amount of transactions fall through if people have not factored in the additional cost in making a purchase.
It only takes one buyer in a chain to pull out and all of a sudden it has a knock on effect on all the linked transactions too.
That being said solicitors and agents should now be advising all their agreed sales to factor the added cost in as meeting this deadline is unlikely.
Likewise anyone looking to purchase now should not be placing an offer if they can’t afford the additional cost.
The cut off at the end of March means lenders, solicitors, agents, surveyors will already have extremely heavy workloads and the average time taken from ‘offer agreed’ to completion’ will already take most people into late spring/early summer if they are only starting their journeys now.
Will Rishi Sunak lengthen the stamp duty holiday when he announces his budget on 3 March? Possibly, but who knows?
There has been growing support in parliament and cross party support at that, but the governments previous insistence that it was only a temporary measure the last time this was debated is potentially not the most promising.
What we are seeing at Douglas & Gordon though is extremely promising.
A sales pipeline way up on last year, applicant numbers through the roof and our best January for valuations booked in a decade.
The stamp duty holiday undoubtably helped boost our listings and agreed deals last year as movers wanted to make the most of the saving.
These increased listings have then had a positive knock on effect on applicant numbers. However I don’t feel the stamp duty holiday can take all the credit as I believe we are also seeing over three years of pent up demand coming through after a very tricky period that saw Brexit, elections and now coronavirus causing people to sit on their hands and wait it out.
In January last year before COVID-19 hit we were starting to see this demand come through and Q1 was shaping up to be an amazing start to the year until we hit the pause button and went into lockdown.
Now though despite a national lockdown I am sensing the return of positivity. People are bored of sitting on their hands and want to get on with life again.
Couple this with the vaccine roll out I believe people can see the light at the end of the tunnel and we could see a very busy second half of the 2021.
