Property portal Rightmove says it estimates 74,000 properties could miss out on the SDLT reliefs available until 31st March 2025 as it predicts a ‘conveyancing logjam’ in the run up to the deadline; it is calling for a a short extension to be considered.
Of those 74,000, 25,000 are estimated to be first time buyers (FTB) based on typical FTB homes (two bedrooms or fewer) priced up to £625,000. The numbers have been forecast based on the total number of properties going through the transaction process and the date they are likely to complete based on area and type of property and Rightmove’s own average time to complete which currently sits at 163 days.
The portal says
The net effect for this group, who are set to complete just one month later, is a collective £142 million in additional stamp duty tax, compared with what they would have paid if they’d been able to complete in March. For first-time buyers, it is a total of £34 million extra in costs.
It is calling for an extension to help the disproportionately affected FTB community. An average home-mover in England will face an extra £2,500 in stamp duty costs from 1st April. However, while FTB homes priced at £300,000 or less will continue to pay no stamp duty, FTB homes priced between £500,001 and £625,000 are the most affected group of all, facing an extra £11,250 in costs.
Rightmove’s property market expert Colleen Babcock says
“We expect a rush to complete close to March 31st as first-time buyers and home-movers try to avoid paying extra in tax. Our numbers show how there is a relatively small, but disproportionately impacted group of first-time buyers who will be caught out by the changing thresholds, highlighting some disparities in the way the current system works. With 74,000 people only just set to miss the deadline, in part because of the extremely lengthy completion times in England, we think it would make sense to grant a short extension to the deadline and help these movers, rather than have them face higher charges when they complete later in April.”
Nathan Emerson, CEO of estate agency membership body Propertymark comments:
“There will be a lot of first-time buyers disheartened by the fact that they will have to pay, in some cases, thousands of extra pounds to complete their house purchase from April especially as many of the delays experienced will have been out of the buyers’ control due to issues presented in the property chain.”
“Moving forward, we know that those determined to buy a home and step onto the property ladder will factor this into their costs. However, for some, this is not possible or will not be easy to accomplish. The extra cost may come as a blow and set people back from being able to make their aspirations of owning a property a reality. It’s important that the UK Government takes this into consideration moving forward and in order to keep the property chain moving fluently well into the future, financial support may well be needed.”
3 responses
We’re worried about saving home buyers millions?
The scam of conveyancing firms fleecing clients of additional funds by charging a fee for exchanging and completing within a five day window might be one to start with?
There’s 8 figures a year. Every year.
As for this request…
May I just point out the very very obvious?
If you extend the deadline then there will be new buyers trying to make the new deadline. Therefore as we approach the newly extended deadline we can have the same headline. Expressing concern still for all the buyers who won’t make it.
Would we not be better to all point out to Gov that affordability is still constrained and this stamp tinkering means little to gov coffers and a lot to the market. Therefore scrap the change in full?
Surely the short extension mentioned would be for those already a certain way down the process….
Define it.
Offered?
Sold?
Conveyancer instructed but not yet paid?
Searches done? Not done?
Absolute minefield.