The stamp duty holiday, which was introduced at the beginning of July, has encouraged more Britons to sell their properties and buy elsewhere. Britons buying a property for under £500,000 currently don’t have to pay the tax. However, on March 31 2021 the stamp duty holiday will come to an end, which has resulted in a rush to push transactions though before the deadline.
But despite the savings Britons can make on purchases by not paying stamp duty, an expert has revealed why Britons shouldn’t rush to buy a property before the deadline.
Chartered surveyor and director at Good Move, Ross Counsell, said Britons could end up “spending more money in the long run”.
The latest House Price Index from Halifax has revealed that the average house price in the UK has risen dramatically.
The surge is a result of increased demand in people looking to buy and sell their homes and move to more rural locations away from the cities.
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The figures suggest house prices rose by more than one percent in November, adding almost £3,000 to the cost of an average UK home to £253,243.
Mr Counsell explained: “We know that many sellers are rushing to sell their property ahead of the stamp duty deadline at the end of March so they can benefit from the savings on their next purchase, but rushing to reach this deadline could result in you spending more money in the long run.”
The property expert explained that buyers have just three and a half months before the stamp duty deadline comes to an end, which is “cutting it fine” if you want to complete a purchase before then.
In that time, buyers will have to find a home, put in an offer and then wait for it to be accepted before embarking on the transaction process.
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Mr Counsell said buyers shouldn’t “rush” to make such a big decision.
“If you do, it could mean a whole host of costly problems later on that you simply didn’t have time to spot during the viewing and buying process,” he added.
However, this isn’t the main reason to avoid buying now.
He is predicting that house prices will take a plunge between now and the New Year, and “especially” closer to the stamp duty holiday deadline.
“If you do buy a home between now and then, it’s likely you will be overpaying for the property,” he said.
Mr Counsell continued: “Mortgage approvals are at an all-time 13-year high too, which has in turn made them even more selective to who they lend to, which again results in buyers needing a larger deposit and mortgage payments if they are to be successful in their application.
“This is expected to calm down after the stamp duty holiday as less people will be applying for a mortgage, so you might find you’ll get yourself a far better deal if you wait.”
Those who do buy now could end up paying more for their home and putting forward a bigger deposit.
The stamp duty holiday has led to a premature property market boom but Mr Counsell believes with the economy still remaining uncertain, the property market is still bound to be affected.
“Although each property is different, 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.”