Hang on to your hats, it is not over yet!
Whilst the main part of the Stamp Duty Land Tax (SDLT) holiday came to an end on 30 June there remains a saving to be had on the standard rates until 30 September 2021.
Between 1 July and 30 September, inclusive, the SDLT threshold is £250,000 meaning that no SDLT will be charged on the first £250,000 of your purchase. The remainder of your purchase price will be taxed at the standard rate. This equates to a saving of £2,500. To take an example of a purchase of a family home of £300,000 this would be a saving of half of the total SDLT payable on the purchase.
Whilst the level of new instructions has dipped from the highs that we saw toward the end of 2020 these do remain higher than usual for the time of year. Properties are still selling well and although the Estate Agents have a reduced stock this is down in part to the high demand meaning that when they get a property to sell it goes quickly rather than taking a little time to sell as there remains a high demand.
At this time, we are seeing prices sky rocket due to the high demand. Frequently properties in the Hailsham area are selling for well over the asking price. We would sound out a word of caution on this front that if you are buying with a mortgage you do need to consider whether if the market cools this would leave you with little to no equity in the property you have just bought.
The government backed 95% mortgages are available in certain circumstances but it would not take a significant drop in the market to then put you into negative equity. The market has risen considerably in the past 12 months at a rate which, we would expect, is not sustainable. We have seen mortgage companies disagree with the purchase price on some transactions and you should be aware that although you may be willing to pay over the odds to secure the property, your mortgage company will not.
Provided that the supply can keep up with the demand we expect to see a busy property market up until at least the end of September when the SDLT holiday will end completely and the rates return to normal.
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Please note that this article does not constitute legal advice. You should always speak to a legal professional to discuss your circumstances and consider your options.