The Stamp Duty deadline is approaching on March 31st, with many potential buyers rushing to find a home before then to help increase savings on their property. However, it might pay to wait until after the Stamp Duty Holiday ends in March, and not rush to buy a property before then.
There are many reasons why this might in fact be a better option. First, to cope with the demand of the Stamp Duty Holiday, and more people looking to move into more rural, spacious properties, average house prices in the UK have surged dramatically, and are now at a record high. Figures from the latest Halifax HPI show that average house prices now stand at £253,243, and the average property price has risen by more than £15,000 since June.
However, we predict house prices to fall even further in the next few months, and especially around the end of the Stamp Duty Holiday. So, if you do buy a home between now and then, it’s likely you will be overpaying for the property. If you do wait, you might end up saving more on a property than you would from the savings of the Stamp Duty Holiday on current house prices.
What’s more, March 31st is only three months away, meaning for anyone wanting to take advantage of the Stamp Duty holiday before it ends, they have very little time to find a home, put in an offer, wait for it to be accepted and complete the purchase, which is cutting it fine even in ‘normal’ circumstances.
It’s always best to spend time finding the right home for you and your family, and you should never rush a decision this big. If you do, you could end up buying a property that needs a whole host of costly renovations later on that you simply didn’t have time to spot during the viewing and buying process. Take time to properly view a property first and take a checklist with you of key things to spot, and you can minimise the chances of this happening.
Not only are house prices at an all-time high, but mortgage approvals are at a 13-year high too. With so many potential buyers applying for a mortgage, this makes lenders even more selective to who they lend to. Therefore, buyers will generally need a larger deposit and higher monthly mortgage payments if they are to be successful in their application.
The mortgage approval rate is also expected to calm down after the Stamp Duty holiday ends, as less people will be applying for a mortgage, so you might find you’ll get yourself a far better deal and better savings if you wait.
Ultimately, each property is different, but if you do end up buying a home now while prices and mortgage applications are still at a high, it could cost you even more money in the long run, even if you are saving on Stamp Duty.
And although the housing market has been resilient throughout the pandemic and shown great growth, the future of the economy remains uncertain and this is bound to affect the property market. We believe the true impact of coronavirus on the property market will become apparent as this year draws to a close.
