Rightmove calls for extension with 25,000 buyers set to miss Stamp Duty deadline

An estimated 25,000 first-time buyers are predicted to miss the Stamp Duty deadline and complete in April instead.

Analysis by Rightmove suggests almost 74,000 home-movers in England are currently going through the legal completion process and will just miss the 31 March deadline before thresholds drop.

The total number of homes currently going through the legal completion process is much higher, however most were never likely to make the 31 March deadline, the portal said.

The net effect for this group, who are set to complete just one month later, is a collective £142m in additional Stamp Duty tax, compared with what they would have paid if they’d been able to complete in March. For first-time buyers, it is a total of £34m extra in costs.

The estimate is measured by homes with two-bedrooms or fewer, a typical home a first-time buyer would purchase, and priced up to £625,000, which is the current maximum Stamp Duty threshold to be considered a first-time buyer.

The analysis looked at the total number of homes currently going through the legal completion process, and the date they are likely to complete, based on factors including the area and type of property. The data is based on homes marked Sold Subject to Contract (SSTC) and Rightmove data on the average time to complete a home purchase, which is currently 163 days, or just over five months.

At a regional level, buyers in the South East are set to be most impacted, with the highest number of movers from the region set to only just miss out on the Stamp Duty deadline and complete later in April. With the South East being the second highest-priced region for homes, this group is likely to face greater costs.

Rightmove is now calling for a short extension to the deadline by the Government, to help the 74,000 home-movers who will only just miss out on the deadline and end up paying more tax through no fault of their own.

Particularly the 25,000 first-time buyers who will already be saving and stretching themselves as far as they can to get onto the property ladder.

Colleen Babcock, property market expert for Rightmove, said:

“We expect a rush to complete close to March 31^st as first-time buyers and home-movers try to avoid paying extra in tax.

“Our numbers show how there is a relatively small, but disproportionately impacted group of first-time buyers who will be caught out by the changing thresholds, highlighting some disparities in the way the current system works.

“With 74,000 people only just set to miss the deadline, in part because of the extremely lengthy completion times in England, we think it would make sense to grant a short extension to the deadline and help these movers, rather than have them face higher charges when they complete later in April.”

Commenting on the research, Nathan Emerson, chief executive of Propertymark, said:

“There will be a lot of first-time buyers disheartened by the fact that they will have to pay, in some cases, thousands of extra pounds to complete their house purchase from April especially as many of the delays experienced will have been out of the buyers’ control due to issues presented in the property chain.

“Moving forward, we know that those determined to buy a home and step onto the property ladder will factor this into their costs. However, for some, this is not possible or will not be easy to accomplish. The extra cost may come as a blow and set people back from being able to make their aspirations of owning a property a reality.

“It’s important that the UK Government takes this into consideration moving forward and in order to keep the property chain moving fluently well into the future, financial support may well be needed.”