Although the pandemic has had a devastating impact on so many aspects of everyday life, the housing market has stayed surprisingly strong, probably in part due to the stamp duty holiday. It was initially thought that house prices may fall due to the impact of Coronavirus, but instead they have seen a steady increase, and the stamp duty holiday for properties less than £500,000 means demand has soared, and estate agents have been busier than ever.

With rumours that stamp duty will now be extended further than its deadline of 31st March, to the end of June, what does this mean for buyers?

Buyers Already in Progress

Estate agents have been inundated with house purchases, and so there are hundreds of thousands of transactions caught up in the backlog. Many people who bought houses, and were expecting to make the 31st March deadline, have recently faced the possibility that their purchase may not go through in time, meaning they would have to pay the stamp duty through no fault of their own.

If the deadline is extended, these buyers should be able to get their sales closed in time, and so they shouldn’t have to worry about the stamp duty.

Those Looking to Buy

Although the possible extension is definitely a positive thing for those who are looking to buy imminently, there’s no guarantee it will benefit those who are looking to buy in the near future. Adding an extension to the stamp duty holiday will mean more and more sales get added to the bottom of the list, and end up in estate agents and conveyancing backlogs. So future buyers may be lulled into the illusion that they won’t have to pay stamp duty, before realising their purchase is so far behind that the extension will have ended before the sale goes through.

The Wider Property Market

Whilst it is always difficult to predict the impact of any singular measure on the property market as a whole, it is possible that the end of the stamp duty holiday could bring a fall in property prices. Estate agents assume that a number of sales may fall through, due to stamp duty ending. As the furlough scheme is also about to end, and job losses are predicted, this could also slow down the market and cause prices to drop.

 

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