In the debate over the looming stamp duty deadline, Sandra Davidson’s Azeem Salemohamed argues for stability above all things…
With the government’s stamp duty holiday due to end on 31 March, there have been calls for the Chancellor, Rishi Sunak to announce an extension. The measure may have single-handedly restarted the housing market after the first lockdown. But it has also been a victim of its own success, boosting demand to such a level that logjams in the system mean buyers face the disappointment of not completing on time.
When it comes to extending the holiday, I’m of a pragmatic persuasion. I tend to think the government should end the tax break as planned and let the housing market adjust. My reason is that markets react well to good news – but also to bad. What they don’t like is uncertainty – and there’s a lot of this at the moment. Aside from stamp duty, there’s the small matter of the coronavirus vaccine roll-out and its impact on lockdown.
The problem in the market is that there is currently a lot of demand – our stats show there were 10% more property views in January than the same month a year ago. Meanwhile, Rightmove data for our patch shows there were 268 new listings this January compared to 321 in 2020.
But it’s artificial demand, with people pushing themselves to buy before the deadline when they aren’t necessarily ready. After all, who doesn’t want to save money on tax? As a result, we’re getting offers that are higher than we’d expect. So, while people may be saving £10k on stamp duty, they’re paying £15k more for the property.
Buying and selling at the same time?
Here are 10 things that could go wrong, and often do go wrong, and what, if anything, you can do to avoid them.
Buying and selling at the same time?
Here are 10 things that could go wrong, and often do go wrong, and what, if anything, you can do to avoid them.
Vendors, however, are more apprehensive right now – allowing viewings during lockdown is one factor. But they are also a little bit wary because high demand is pricing them out of the properties they want to buy. Plus, we’ve noticed that its harder to get a mortgage at the moment, even if you are looking to sell to buy.
The banks are being very prudent in terms of lending, vendors are nervous – this takes us back to my original point. Wouldn’t it be a positive thing to end the uncertainty of the holiday deadline, draw a line in the sand and let the markets resettle?
That said, if you’re serious about moving home, the message from us would be that you can make this happen. There’s never a bad time to move if it’s the right thing for you. By putting your home on the market now you can gauge interest and, if you get an offer agreed, be in a much stronger position to buy, should there be a dip after the stamp duty holiday ends.
What we are advising is for vendors to be realistic about pricing – people will now be factoring in the full stamp duty. But before you decide, do talk to us. We can help you understand where the market is at, and offer the advice that will help you get the best offers in the current circumstances.
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