What is stamp duty?
Essentially, it’s a land tax that must be paid if you purchased a property or a piece of land for a certain amount of money.
How much the stamp duty tax ends up being will depend on the overall price of the property and the type of property being purchased. For example, whether it is residential, non-residential, mixed-use or whether you are a first-time buyer.
Stamp-duty was cut in an emergency mini-budget early this year, with the Chancellor slashing the tax in order to help people move home and to kickstart the housing market after the pandemic triggered a slump. Some buyers could potentially save up to £15,000 in tax, and the stamp duty holiday isn’t due to end until the 31st March 2021.
Fears that buyers will miss out due to delays
New figures have revealed that as many as 325,000 buyers will not be able to complete by the stamp duty deadline in March next year. This is mainly due to issues with conveyancing, surveying, mortgage and search services.
There’s also the issue of rising interest rates on mortgage deals, with many borrowers now typically having to pay £600 more over the course of a two-year fixed deal. The mortgage market itself is of course experiencing a shortage in overall mortgage deals too at the moment, with the number of offers from banks and building societies halving since the beginning of 2020.
August saw a surge in house prices in every region as the stamp duty exemption on property valued up to £500k seemed to fuel a sales boom. However, the property market, from lenders to solicitors, is seemingly struggling to cope with the demand from those looking to take advantage of the stamp duty holiday. This has led to delays in buyers being able to secure mortgages, as well as delays in completing all the legal paperwork too. As the stamp duty deadline next year draws closer, experts fear delays could spiral further.
Are you looking to secure a mortgage during this time?
No doubt the last few months have caused the housing market to be in seemingly a constant state of flux, however if you’re looking to secure a new mortgage deal we can help.
We’re independent mortgage brokers in Manchester, who can help you get the very best deal on your mortgage. Plus, while stamp duty is still temporarily reduced now may be the perfect time to see what kind of deal you could get. Don’t delay in getting the right advice, speak to our experts today.
