At the beginning of the pandemic, the last thing that anyone was thinking about was stamp duty. Lives were being turned upside down, and anyone who had a house move planned during this turbulent time suddenly found things grinding to a halt. The stamp duty ‘holiday’ was the government’s reaction to this crisis, and an attempt to avoid market stagnation.
What was the stamp duty holiday?
To keep the property market from collapsing, the government first lifted the freeze on home moves, and then in the following July, announced a cut in stamp duty to keep the housing sector buoyant and to ‘boost confidence’
The housing market survived, people kept buying and selling their properties and taking full advantage of a ‘stamp duty holiday’. Of course, everyone knew that it would come to an end eventually, but how much of an impact did a return to normalcy have?
How does it work?
Under the stamp duty holiday period that ended in June 2021, anyone wanting to buy a home in the UK that cost under £500,000 wouldn’t have to pay stamp duty. That meant potential savings of up to £15,000 on the purchase of a larger home – a figure that was definitely not to be sniffed at. Landlords and second-home buyers also qualified for the tax break, but were required to pay a 3% surcharge in addition to the revised rates. After June, the process was downscaled or ‘tapered’, meaning that the upper limit dropped from properties worth up to £500,000 down to properties in the £250,000 or less price bracket. This still constituted a potential saving of up to £2,500, considerably less than the initial amount but still enough for a reasonably-priced new kitchen.
What happens now it has ended
The stamp duty holiday finally came to an end on 30th September 2021. That means the scale of stamp duty charges has returned to its pre-Covid levels. The thresholds are:
The big question is that, now the stamp duty holiday has ended, what will happen to house prices? Obviously, during the holiday, potential homeowners took full advantage of the reduction in the costs they’d have to pay for their new home, and in some cases, it may have encouraged buyers to put in a higher offer to be certain of securing their dream property (as long as it fell within that £500,000 upper limit), a situation that certainly suited both buyers and vendors. The ending of the stamp duty holiday also encouraged a rush on house sales as people scrambled to buy their houses before the deadline.
However, predictions are that, along with rising inflation, a squeeze on wages, and the mounting costs of both Brexit and the Covid pandemic, the loss of the stamp duty holiday may put the brakes on the housing market next year. Other experts, however, predict a boom year, with demand continuing to outstrip supply, driving prices ever higher.
Are there any other resources or help available when it comes to buying a home now?
Stamp duty has never been popular and there are constant calls to scrap it altogether. However, because of the amount of revenue it creates for the government, it’s unlikely that we’ll see the demise of this property cash-cow any time soon.
The government has announced a new Mortgage Guarantee system, which it’s hoped will minimise the effects of the end of the stamp duty holiday and provide buyers with a little more support in these difficult times. It means that buyers will be able to access a mortgage with just a 5% deposit. That in itself has its good and bad points (easier initial purchase but higher repayments for a larger mortgage, for example), but it may help buyers who are struggling to get a larger deposit together. It’s available for properties with a value of up to £600,000.
The Help To Buy: Equity Loan scheme, designed specifically for first-time buyers, also came into effect in April, providing mortgages with just a 5% deposit.
Regardless of whether this is your first home or you’ve already been on the property ladder for a while, talking to a property law expert or professional conveyancer who can help you find the right financial deals could make a real difference when you’re browsing those estate agent windows for your next home.
|__hssrc||session||This cookie is set by Hubspot whenever it changes the session cookie. The __hssrc cookie set to 1 indicates that the user has restarted the browser, and if the cookie does not exist, it is assumed to be a new session.|
|cookielawinfo-checkbox-advertisement||1 year||Set by the GDPR Cookie Consent plugin, this cookie is used to record the user consent for the cookies in the "Advertisement" category .|
|cookielawinfo-checkbox-analytics||11 months||This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".|
|cookielawinfo-checkbox-functional||11 months||The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".|
|cookielawinfo-checkbox-necessary||11 months||This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".|
|cookielawinfo-checkbox-others||11 months||This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.|
|cookielawinfo-checkbox-performance||11 months||This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".|
|__cf_bm||30 minutes||This cookie, set by Cloudflare, is used to support Cloudflare Bot Management.|
|__hssc||30 minutes||HubSpot sets this cookie to keep track of sessions and to determine if HubSpot should increment the session number and timestamps in the __hstc cookie.|
|ss||session||This cookie is set by the provider Eventbrite. This cookie is used for the functionality of website chat-box function.|
|TawkConnectionTime||session||Tawk.to, a live chat functionality, sets this cookie. For improved service, this cookie helps remember users so that previous chats can be linked together.|
|__hstc||1 year 24 days||This is the main cookie set by Hubspot, for tracking visitors. It contains the domain, initial timestamp (first visit), last timestamp (last visit), current timestamp (this visit), and session number (increments for each subsequent session).|
|_ga||2 years||The _ga cookie, installed by Google Analytics, calculates visitor, session and campaign data and also keeps track of site usage for the site's analytics report. The cookie stores information anonymously and assigns a randomly generated number to recognize unique visitors.|
|_gat_gtag_UA_162540320_1||1 minute||Set by Google to distinguish users.|
|_gcl_au||3 months||Provided by Google Tag Manager to experiment advertisement efficiency of websites using their services.|
|_gid||1 day||Installed by Google Analytics, _gid cookie stores information on how visitors use a website, while also creating an analytics report of the website's performance. Some of the data that are collected include the number of visitors, their source, and the pages they visit anonymously.|
|hubspotutk||1 year 24 days||This cookie is used by HubSpot to keep track of the visitors to the website. This cookie is passed to Hubspot on form submission and used when deduplicating contacts.|
|_fbp||3 months||This cookie is set by Facebook to display advertisements when either on Facebook or on a digital platform powered by Facebook advertising, after visiting the website.|
|fr||3 months||Facebook sets this cookie to show relevant advertisements to users by tracking user behaviour across the web, on sites that have Facebook pixel or Facebook social plugin.|
|test_cookie||15 minutes||The test_cookie is set by doubleclick.net and is used to determine if the user's browser supports cookies.|