Amidst a year that has seen turbulent times for individuals and economies all over the world, a silver lining of opportunity is emerging for those interested in the UK property market.
The most notable opportunity that has developed in recent months is the stamp duty holiday, first introduced in July by Chancellor Rishi Sunak, which has seen 85% of homebuyers pay no property tax on new properties in recent months.
What exactly is stamp duty?
Stamp Duty Land Tax is a UK property tax paid by someone who purchases property or land in England or Northern Ireland (it’s slightly different from Scotland where it is called Land and Buildings Transaction Tax, while in Wales it’s known as Land Transaction Tax). This tax is only paid when the sale is complete and is based on the sum paid for the property or land.
How has the stamp duty holiday benefited buyers in 2020?
According to new research, there were 20,238 transactions between Sunak’s announcement in July and the end of August, of which a whopping 85% fell below the new £500,000 price threshold, and thus paid no stamp duty. Previously the threshold had been £125,000 and above for repeat buyers, and £300,000 for first-time buyers.
According to the Land Registry the holiday has saved around £100 million for buyers during this period, benefitting thousands of homebuyers in these uncertain times and helping the housing market bounce back from the pandemic’s impact.
Why now might be the time for “Generation Buy”
On top of that, Prime Minister Boris Johnson has declared that he is working on a “revolutionary” new mortgage scheme that will entice young, first-time homeowners to buy into the market despite ongoing economic and Covid-related concerns, potentially paying mortgage deposits as low as five percent.
Speaking to the Daily Telegraph he said: “I think a huge, huge number of people feel totally excluded from capitalism, from the idea of home ownership, which is so vital for our society, and we’re going to fix that – Generation Buy is what we’re going for.”
While there is still a lot to be determined before the new scheme is rolled out, this announcement by the Prime Minister illustrates the importance of the property market and the dedication by government to protect it and buyers.
The proof is in the numbers
The above-mentioned measures have clearly had an impact on the market, and according to Halifax (part of Lloyds Banking Group, the UK’s biggest mortgage lender) mortgage applications have hit 12-year high as house prices experience the fastest rate of growth in four years.
The reason for this increased interest comes down largely to the effects of Covid-19 and the resulting lockdowns’ impact on people’s lifestyles and needs, as well as buyers hurrying to take advantage of measures like the stamp duty holiday, which ends on March 31st 2021.
While that might seem far away, it takes a number of months to arrange financing and finalise legal matters for a new property purchase, so it’s advisable to start the process sooner rather than later if you want to make it within the designated time frame.
Contact Tailor My Property today to find out more about our specialist services and incredible network of property and finance experts who can guide you through the whole process from beginning to end.