The end of the stamp duty holiday on 30 June might have sounded alarm bells for many who were desperate to make savings before the deadline passed but it’s great news for first-time buyers. The tax break on stamp duty was introduced by Chancellor Rishi Sunak in a bid to boost the housing market in July 2020 as the country emerged from its first lockdown. It worked.
Around 1.3 million home buyers were exempt from paying stamp duty of up to £15,000 on the first £500,000 of the price of their property until the scheme began to wind down at the end of June. But the scheme that saw the housing market thrive and bought savings for so many came at a huge cost for those who were desperate to take their first step onto the property ladder.
With more time spent at home during lockdown and a call to work from home, thousands took the opportunity to move to bigger, more flexible space and away from the cities. The take-up of the stamp duty holiday meant house prices spiralled, distorting the market to the point where a deposit needed to buy a first home was quickly out of reach.
Nationally, house prices rose by £16,000 and £8,400 in London before the scheme ended, but now expectations are rife that the market will now begin to see a return to post-pandemic normality. That means first-time buyers will have their chain-free competitive advantage restored with far fewer rivals standing in their way. The threshold at which tax must be paid has now dropped from £500,001 to £250,000 and will revert to its pre-pandemic rate of £125,001 on 1st October 2021 – then it will only be first-time buyers who’ll get stamp duty relief on homes worth under £300,000.
If you’re a first-time buyer and keen to make your move into a first home of your own, talk to us now. The average time for a house sale to complete is currently around five months due to the backlog caused by the pandemic, so now’s the time to get serious with your purchasing plans.
Find out more about stamp duty and how much you need to pay here.
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