‘There’ll be a few tears before bedtime’: The race to complete house sales before stamp duty holiday ends
The last day of a holiday can often be a bit manic.
And that’s certainly the case today (Thursday, September 30) as homebuyers across Greater Manchester race to complete sales before the Government’s stamp duty holiday comes to an end.
The ‘nil rate’ stamp duty band in England and Northern Ireland was temporarily raised to £500,000 in July 2020, enabling buyers to save up to £15,000.
It helped to turbo-charge the housing market which had almost ground to a halt early in lockdown.
From July 1 this year, the holiday was tapered to £250,000, prompting a rush of activity as buyers looked to maximise their savings.
Since then buyers have still been able to make smaller savings of up to £2,500 under the tapered holiday, which ends on October 1, when the stamp duty threshold will revert to its normal level of £125,000.
Alistair Baldwin, sales and new business manager at Spencer Harvey estates agents in Shaw Heath, Stockport, says the last five or six weeks ‘have just been a race to get the deals done’ as buyers desperately try to take advantage of the tax relief.
He said: “It’s been outrageous for the last couple of months.
“Solicitors have literally been flipping coins to see which sales they can get over the line.
“There have been some disappointed buyers and a few tears before bedtime.
“It’s been crazy, but it’s been a real boost for first-time buyers and a lot of the new builds are still covered by the £250,000 limit, so people can save a significant amount of money.
“However we are predicting there’ll be a dip later this year as everyone takes a step back.”
David Thomas, from Thomas Lardner estate agents in Romiley, Stockport, said: “There’s certainly been a rush to get completed before the stamp duty holiday ends, but for us we were busy about three months ago.
“People realised it would take three to four months to go through the conveyancing process, so we’ve only been busy handing over keys, which hasn’t been too onerous
“But I know solicitors are rushed off their feet this week. I know a few who have stopped taking calls, so they can concentrate on getting the sales through in time.”
The result of the stamp duty holiday was to fuel inflation in house prices.
According to recent figures from Zoopla, the average UK house price has increased by more than £17,000 since the start of lockdown in March 2020.
And according to the Land Registry the average sum paid for a home in the UK was £239,036 in August 2020, rising to £255,535 in July 2021, which more than wipes out the maximum savings in stamp duty.
Alistair Baldwin says the tax break has led to some estate agents raising asking prices, but he says buyers, frustrated at previously missing out on homes in a hectic market, are also offering above the odds.
He said: “A lot of surveyors are just tearing those valuations to pieces when they see them, which is a good thing.
“If I see it happening I just walk away. It’s poor estate agency.
“But the other side of the coin is some clients are getting so frustrated they’re just putting in crazy offers which is also driving sales.”
The conveyancing department at Slater and Gordon, one of the UK’s largest law firms, told the Manchester Evening News they were dealing with three times the number of completions today than normal.
Victoria Marshall, head of conveyancing at Pearson solicitors, which has offices in Oldham town centre, Hollinwood and Failsworth, said it’s been an ‘extremely busy’ few weeks, driven largely by second time buyers.
She said: “For the last 12 months it’s been relentless. We’ve seen our strongest performance for a long time.
“We’re not a big conveyancing department, but our share of the firm’s turnover has gone from 5.4% to 8.4%.
“But we definitely would be having a very different conversation right now had we not had the stamp duty holiday.
“Buyers have been far more active, particularly in the North West, than I think they would have been otherwise, especially in that £500,000 bracket.
“I think people were going to wait to see what happened, but then the people who were able to keep working were saving so much money they just went for it.
“It’s largely second time movers, people who are moving up the ladder. But the first time buyers are still there and we are are seeing a lot of older first time buyers as well.
“We are acting for one first time buyer who was able to save several thousand pounds during lockdown. They never thought they would be a homeowner.”
But Victoria says inevitably there will be completions that won’t go through today, meaning buyers will miss on the stamp duty break
She added: “People think that solicitors are obstructive – we’re not, it’s just that they are so many rules we have to follow.
“Once that agreement is done there is so much work that goes on behind the scenes that you just don’t see.
“We take on everyone’s stresses.
“So it has been very stressful, especially when you have to tell people it isn’t going to happen before the 30th.
“But as a team I am really proud of what we have done for the September deadline. I can hand on heart say that we got everybody in that we could.”
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