This year's "Stamp Duty Crunch" explained in 2 minutes
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This week our research team carried out a survey of over 3,000 home buyers who currently have home sales going through. Why? We want to know how the stamp duty crunch is affecting them. But what is happening with stamp duty at the moment? Here's a super-short article to bring you up to speed.
What is Stamp Duty?
Usually there is a tax called Stamp Duty, which people have to pay when buying a house. It's usually around 1% of the property value.
The average house price in the UK is around £256,000, and the stamp duty on that value of property would be £2,500... So it's quite a lot of money for already-strapped homebuyers to pay when buying a property.
This is a super simplified description though. There are actually all different types of rates and thresholds depending on various circumstances. We've written a full in-depth article, complete with examples, here:
Related Reading: What Is Stamp Duty? (And how much is it?)
What is the "Stamp Duty Holiday"?
The Government were worried that the housing market was going to crash because of COVID, so they removed the tax to try and help people keep buying properties - and give them an incentive to buy now rather than putting their plans off for the future. This "stamp duty holiday" is set to run until the end of March. Any sales that complete after then will need to pay stamp duty.
What impact did the stamp duty holiday have?
After the incentive was introduced, so many people flooded into the housing market to buy property and make the most of the saving, that basically the market couldn't cope with the amount of demand.
Estate agents, solicitors, mortgage brokers, local authorities... All these parties were already struggling to keep up because of the shift to remote working, but now they're swamped by the increased demand too.
This basically means that all the sales are moving really really slowly now, so people don’t know when they’ll be able to move, and everyone’s just getting really frustrated. We've had a record number of enquiries for our "buy my house" service, which sellers typically use when the traditional market is failing them, and they just want to get their sale done at long last.
What's more, we've recently covered Rightmove's announcement that an estimated 100,000 buyers are still going to end up paying stamp duty anyway, as their sales are anticipated to complete after the end of March.
So... What happens next?
Well, our research this week indicates that the delays are having a serious impact on those affected. Many would even be willing to actually pay the stamp duty if it meant they could just got their purchase done and move in. Likewise, many sellers are happy to accept a lower price for their home via our "we buy any house" service if it means just getting their sale done.
There are growing calls for the Government to extend the stamp duty holiday in order to make sure that everyone who budgeted to get the saving actually do... But so far, no news.
Regardless of what happens with Stamp Duty, the strain the "holiday" has placed on the UK's housing market exposes our archaic system and will hopefully be a driver for change in the future. (Although we've said that about a lot of different things for decades now - and still nothing's really changed).
A "plan b" for sellers & buyers in a jam
For those sellers who would want to skip the backlog, you can... You can sell your house fast directly to Yes Homebuyers.
Our process allows us to buy from you in as little as two weeks, skipping the market backlogs altogether. There's a compromise on price, because we only buy for around 80-85% of the market value. But if you favour speed, convenience, and some real certainty over actually being able to move then it could be the perfect option for you.
Get in touch with our team if you'd like to learn more - we can have an offer with you within 24 hours.
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A BIT ABOUT US...
Selling your home to Yes Homebuyers
- Yes Homebuyers buy your home directly from you so you can sell your house fast and avoid waiting around to find a buyer on the regular market.
- We offer flexible timeframes to suit you and on average, complete a sale within 30 days.
- Yes Homebuyers' quickest completed purchase was made in six days.
- We guarantee the price we will pay, unlike some buying platforms who reduce their offer shortly before completion.
- There are no fees or costs involved and we cover all legal fees involved.
- There are no contracts or tie-ins even if you accept an offer, and no viewings to take care of.
About Yes Homebuyers
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