Our property lawyer Caroline Fletcher-Shaw reacts to the chancellor’s stamp duty announcement
Buyers, sellers and property specialists are still digesting yesterday’s stamp duty announcement in what’s been dubbed the chancellor’s ‘mini budget’ of 2020.
Chancellor Rishi Sunak announced the temporary increase in the stamp duty threshold, from £125k to £500k, with immediate effect from 8 July 2020 until 31 March 2021. But what does it mean for the property market?
Boom . . . but for how long?
Here at Wilkin Chapman, we’ve been extremely busy since the property market opened in May. Completions resumed quickly and estate agents were given the green light to allow property viewings (while adhering to social distancing measures).
All in all, we’ve experienced somewhat of a boom period in the property market. But the fear has been there all along. How long would it last? Was it just catch-up from the period of total lockdown?
There was always the possibility of a downturn in sales and purchases of residential property. People across the country face uncertain futures, especially as the furlough scheme comes to an end and some sectors resort to redundancies to keep afloat. In these conditions, making a decision to buy or sell won’t be taken lightly. That’s why these stamp duty measures are welcome.
How much will I save?
Those buying and selling their main residence should see a huge benefit. For example, someone buying a new home for £250,000 will see a saving of £2,500. Those fortunate enough to buy up to £500,000 will see a staggering £15,000 saving.
Second homes and other abodes
Second homes and investment properties will still benefit, but it’s vital to note that they cannot take advantage of the 0% Stamp Duty threshold raise. But investors will still make savings from this relief. For example, an investor buying a property at £150,000 will save £500 based on the new rates.
First-time buyers are the least likely to benefit from this stamp duty holiday as most were already entitled to stamp duty relief. And we have seen 95% of LTV mortgages disappear from the market, meaning first-timers now need at least a 10% deposit. 90% of mortgages are also few and far between.
The stamp duty measures are a hugely positive step, helping to secure the survival of the property market in these uncertain times. But it would be great to see more help given to first-time buyers. Moreover, lenders need more confidence to be able to do what they need to do – lend.
You can contact our property lawyer Caroline Fletcher-Shaw on 01482 398 370 or email firstname.lastname@example.org