December 1st, 2020. Mark Hughes
Halfway Through the Stamp Duty Holiday, How Has it Changed the Property Market?
Back in July 2020, Chancellor Rishi Sunak announced a stamp duty holiday that would run until the 31st March 2021. Now, halfway through this break, we’ve taken a closer look at its effects.
What Was the 2020 Stamp Duty Holiday?
Back in summer 2020, Rishi Sunak raised the threshold at which buyers had to start paying stamp duty in England and Northern Ireland from £125,000 to £500,000. This meant that almost nine in ten transactions would no longer be subject to stamp duty.
Wales soon followed England and Northern Ireland’s lead with its own land transaction tax changes, raising the threshold from £180,000 to £250,000 until March 31st 2021. However, in Wales, this does not apply to landlords.
Scotland also amended its land and buildings transaction tax, raising the starting threshold temporarily from £145,000 to £250,000. However, there is no stamp duty holiday for second homes.
Why Was the Stamp Duty Holiday Introduced?
With the average stamp duty bill coming in at £4,500, this temporary change meant huge savings for buyers. The Government hoped this would give the property market a post-lockdown resurgence, boosting the economy.
“"The Government would hope that the savings feeds into additional spending in the real economy with more cash spent on home improvements and white goods rather than enabling buyers to spend that bit more on their next home." ”Zoopla
Director of Research and Insight
How Has the Stamp Duty Holiday Affected the Property Market?
At the end of October, HM Revenue and Customs released its UK property transactions statistical update and revealed that UK residential transactions in September 2020 were similar to September 2019, with 2020 just 0.7% lower. However, when compared to August 2020, September transactions were up 21.3%.
The report showed a steep decline in transactions made in March and April 2020 as lockdown was first announced, rising to a slight plateau in July, then rising again as restrictions eased and the tax changes were implemented.
It’s Not Too Late to Make Big Savings!
If you’re looking to purchase a new home, there is still time to take advantage of the stamp duty holiday. Get in touch with our team to discuss residential mortgages and let’s get things moving before the end of the financial year!
Article By Mark Hughes
December 1st, 2020
Mark has 15 years’ experience within the financial industry working for high street banks and specialist brokers and now focuses on Bridging finance and Second charge loans.
He would describe his style of brokering as being heavily based on knowledge and efficiency.See more articles by Mark