HAVE YOUR DUCKS IN A ROW TO BEAT THE STAMP DUTY DEADLINE

The announcement in October’s Budget that the temporary increases in stamp duty thresholds which were announced in September 2022 would be removed prompted many to predict something of a rush to complete before the new regime comes into effect in April 2025 – and so it has proved, writes Andrew Cusack.

Given that the nil rate band will shrink from its current £250,000 to £125,000, someone buying even a fairly modest home costing £250,000 will be facing a stamp duty bill increase of £2,500 – not inconsiderable. 

The changes also affect first-time buyers, who will see their nil rate band cut from £425,000 to £300,000 (and the maximum value of home they can use it on reduced from £625,000 to £500,000).  The head of mortgages at The Halifax predicted that the changes would give prospective first-time buyers ‘even greater motivation to get on the housing ladder and bring any home-buying plans forward’.

Our own evidence would suggest that this has indeed happened, with a significant increase in activity and new instructions enjoying multiple viewings within the first few days of being on the market.

Given that the average property transaction takes between 12-16 weeks to complete, and that to qualify for the current stamp duty rates, completion must happen on or before 31^st March, is it too late for someone coming to the market now to take advantage of this spike in demand?

The answer is that if you are going to be part of a long chain, it probably is too late; but if you can find a buyer who is chain-free, or at least in a very small chain of just two or three properties, it can still be done.  However, you will need to be a very organised vendor.

Often it is the simple stuff which delays the process, so if you can get this done as you come to market, you stand much more chance of completing by the deadline.

That means things like having your energy performance certificate (EPC), property information form, fixtures and fittings form and (if applicable) lease information form all sorted.  It means digging out your FENSA certificate if you have had new windows as well, for example.  It certainly means having a solicitor instructed, and having somewhere to go when you sell (or being very sure that your own purchase will also complete by the deadline).

Chain-free buyers, and first-time buyers in particular, will be looking for a property that they believe will be able to be purchased by 31^st March in order to avoid the stamp duty increase.  If you can demonstrate that you have all your ducks in a row, you will be a more attractive prospect to them.