March mayhem as homebuyers scrambled for the original stamp duty deadline
Sarah Coles, personal finance analyst at Hargreaves Lansdown, comments on the publication of HMRC’s monthly property sales, showing March mayhem as homebuyers scrambled for the original stamp duty deadline.
Key points:
- 190,980 properties sold in March (seasonally adjusted), double the number from a year earlier and up a third from February.
- This is a record for March since sales started being measured this way in 2005.
- Sales in the 2020/21 financial year finally overtook those in the previous tax year – with 1.2 million sales (seasonally adjusted), up from 1.17 a year earlier. It’s the third busiest of the past 10 years.
- This peak, just before the original stamp duty deadline, mirrors a similar peak in March 2016, the month before higher rates for additional properties were introduced.
Sarah Coles comments:
“The stamp duty deadline caused mayhem in the housing market in March. We saw double the number of sales as the previous March, as buyers scrambled to complete before tax bills rose again. The Chancellor shifted the deadline just before it hit, but by then buyers and sellers were committed.
“We can still expect bumper months in April and May too though, because the process has been flowing like mud, and plenty of sales will have slipped past the original deadline. Newer figures from Rightmove reveal that agreeing a sale has never been quicker, and the number of houses selling within a week has hit a record high. However, the sheer number of people trying to complete while everyone, from councils to law firms and surveyors have been working from home and social distancing has meant the process is taking far longer. Separate figures show the average time taken to complete is now 121 days.
“Given the enormous cost of buying a home, the stamp duty saving isn’t much to write home about, so its impact on the market seems disproportionate. The most it can possibly save you is £15,000, and when you consider that rising house prices have added an average of £20,000 to property prices since last February, overall you may well be paying more, even when the tax saving is factored in.
“However, the stamp duty holiday has a psychological impact far greater than its financial one. It prompts people who had a vague notion about moving some time in the future to firm up their plans and get cracking. It means that once we get past the end of June, we could start to see some of the heat coming out of the market.”
Kindly shared by Hargreaves Lansdown
Main photo courtesy of Pixabay
