Stamp Duty Holiday Impact
If you are looking for guidance on what the stamp duty holiday means to you, and the West Midlands housing market, we are here to help. At Innovate, we are pleased to say we have assisted many vendors and buyers in the local area.
If you have any questions, please feel free to contact us today. Also, if you would like to arrange for a free valuation, please contact Innovate and we will arrange this for you.Stamp duty holiday
On Wednesday 8th July, the Chancellor of the Exchequer, Rishi Sunak, has announced an increase in the stamp duty threshold in the Summer Update. The key points of the stamp duty changes are:
Stamp duty threshold is now GBP 500,000
This increase in stamp duty threshold is set to run until 31st March 2021
The increase in stamp duty threshold takes place immediately
How will the West Midlands market be affected?
According to Zoopla, as at the end of July 2020, the average price paid for property in the B65 postcode area (over a 12-month period) is GBP 157,934. With the stamp duty holiday in place, buyers will pay no SDLT on this property. This represents a saving of GBP 658.68.
For the B69 postcode area, the average price paid for property in the past 12 months is GBP 149,677. Again, there is no SDLT to pay on a purchase at this price, providing the buyer with a saving of GBP 493.54.
The average price paid for a detached property in the B69 postcode area is GBP231,997. For a buyer purchasing a house during the stamp duty holiday, there is a chance to make a saving of more than GBP 2,100.
Given the overall cost of buying a home, and the deadline associated with paying SDLT, anything which provides buyers with the chance to save money should be viewed as a positive factor.
Vendors can feel more confident in the market too
There is also a benefit for the vendor. When buyers feel more confident about looking for property, vendors can feel more confident about entering the market. With some industry experts suggesting there will be an additional 100,000 property sales across the country because of the stamp duty holiday, there is minor cause for optimism in the housing market.
In the grand scheme of buying a house, some people might suggest that a saving of close to GBP 7,000 does not make much of a difference, but this is not the case. Stamp duty has to be paid very shortly after concluding the deal, which places considerable pressure on a buyer to allocate funds to this cost.
Marc von Grundherr, a leading name in the property industry, said; "Breaking down the current property stock available on the market really gives us a good idea as to just how many people are due to benefit from the changes to stamp duty announced last week. The figures show that the vast majority of homebuyers will be better off as a result. Even in London, there will be a considerable saving for a vast number of those transacting across almost every borough."
Marc continued by saying; "However, there is a chance that savvy home sellers who may have seen the value of their property slump due to the recent pandemic will now increase their asking price by that little bit extra. Our advice to homebuyers would be to know your market, stick to your guns when making an offer, and keep your stamp duty saving in your back pocket. You can use it as a bargaining chip should you need it further down the line when negotiating, but don't be forced to over offer straight away."
We know these are challenging times, but at Innovate, we are here to help. If you have questions about the West Midlands property and rental market, get in touch with Innovate, and we will be happy to assist you.