Around 100,000 house sales already agreed ‘will miss stamp duty deadline’

PA

Many home buyers could be in for tax bills they had not budgeted for – as around 100,000 house sales already agreed will miss a deadline to make stamp duty savings, according to an estimate.

A temporary stamp duty holiday is set to end on March 31, and Rightmove said it now takes just over four months on average from an offer being accepted to a property sale being completed.

This indicates that the odds are now stacked against buyers who are still hoping to put in an offer in the coming days and beat the March deadline.

The stamp duty threshold for residential property purchases was temporarily raised £500,000 in July 2020 – but from April 1 2021 it will revert to £125,000.

There are separate rules for first-time buyers, who may still get discounts.

Rightmove's house price map
Rightmove's house price map

Rightmove said a “logjam” of 613,000 agreed sales are currently in the pipeline.

Its analysis projects that around 100,000 sales already agreed will miss out on the stamp duty saving.

This could cause difficulties for some, who had budgeted on the assumption that they would potentially save thousands of pounds in stamp duty.

There are also signs that sellers are still hoping to tempt buyers and squeeze in a sale before the stamp duty holiday ends.

Across Britain, sellers’ average asking prices fell by £2,887 or 0.9% in January, to reach £317,058, Rightmove said.

Tim Bannister, Rightmove’s director of property data, said: “While the tax savings were an added incentive, movers’ desire for more inside and outside space seems to be continuing, and this new lockdown could be a spur to act in 2021 for those who can and who did not do so in 2020.

“However, there are still a huge number of sales agreed in 2020 that are stuck in the processing logjam and awaiting legal completion, with many hoping to beat the impending tax deadline.

“For those who fail to do so, there may be difficulties if they have factored the tax savings into their budget calculations.

“The challenge of processing so many transactions in less than three months is made even tougher by the new lockdown restrictions, Covid-19 sickness and home-schooling further reducing capacity in conveyancing, legal searches and mortgage lending.”

Rightmove’s report also quoted the views of estate agents.

Matthew Smith, sales and lettings director at Thornley Groves in Manchester, said: “The Manchester suburbs, places such as Sale and Altrincham, are absolutely flying.

“People are looking for more outside space, and there’s much more activity at the higher end of the market – ie properties being sold at £500,000 and over – compared to 12 or 18 months ago.

“Many people have outgrown their homes, and with more people now working from home, and undertaking home-schooling, it has really focused their attention on getting their properties ready to sell.

“Many home movers are financially motivated, so the stamp duty holiday has definitely been a sweetener to kick people into action. Savings of up to £15,000 aren’t to be sniffed at, but I don’t think the high levels of activity we’re currently seeing are exclusively due to the tax holiday. It’s simply given people the impetus to be alert to moving home, which in turn has led to more demand.”

Managing partner Sue Macey, of Lodestone Property in Bruton, Wells and Shaftesbury, said: “In 2020, nearly half of our properties for sale went for asking price or above and as we move into the new year, demand is continuing to outstrip supply as people look to set up a new life in the country.

“For months now we’ve been offering prospective buyers the chance to view properties online, including live video tours hosted by our vendors. It’s a great way for interested buyers to ask questions and look at the property as if they were walking around in person and it’s proven to be a big hit.”