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Time to buy?

After months of life in lockdown, the stamp duty holiday is a great reason move on.

Terrace houses signifying Stamp duty land tax holiday. Is it time to buy?

Good news for all those that have seen too much of their houses lately – the government’s stamp duty holiday, which came into effect on 8th July, means property buyers in England and Northern Ireland will save substantially on their purchases. This applies to all transactions completing on or before 31st March 2021 – so if you’re looking to upsize, downsize or relocate, now really is the time to make your move.

Consider the savings
The new incentive raises the 0% threshold for stamp duty land tax (SDLT) on all main residence property purchases up to £500,000 and provides savings of over £2,000 on properties above £500,000. And, as hoped, the stamp duty holiday has galvanized the housing market – so now, more than ever, it is worth instructing your solicitor as soon as you a your property on the market. Here is a summary comparing the rates currently payable:

Band Standard SDLT rateAdditional property SDLT rate
Up to £500k0%3%
£500k-£925k5%8%
£925k-£1.5m10%13%
£1.5m+12%15%

More good news
At the start of the pandemic, mortgage application approvals fell dramatically and a number of banks withdrew their offers bringing the market to a halt. However, over the summer lenders restarted physical valuations and mortgage approvals have increased to their highest levels since February 2020. The outlook is encouraging, yet lenders will remain cautious as many borrowers look to higher value loans. Nationwide, the UK’s second-largest lender, arerestricting parental gifts to 25% of the deposit on mortgages of 90%.

Save time with the right solicitor
With the SDLT reduced rates deadline, instructing a reliable agent and a solicitor as soon as possible is a key to help any potential buyer and seller receive the best service, advice and savings. Property transactions are complex. Having a solicitor who is experienced will make the whole process much smoother, more enjoyable and less stressful. If unexpected problems occur, it is important to be able to get hold of your solicitor and rely on their expertise to guide you through – this is their specialism.

Selling a property
Even though the new SDLT changes benefit potential buyers rather than sellers, it is worth instructing a solicitor as soon as you decide to put your property on the market rather than waiting until you have an offer. Having everything ready will set you off to a great start, without costing you any more. To begin the process, a solicitor will help to you arrange:

• a solicitor’s letter of engagement signed and ID checked
• all the relevant forms completed (and there can be quite a few!)
• property deeds obtained
• a management pack sourced.

This in hand will enable your solicitor to prepare a draft contract pack and issue the same to your potential buyer’s solicitor as soon as they have confirmed their instructions, ready for their due diligence and checks so that the matter can be ready for exchange and a speedy completion.

Budgeting
Factor in costs such as legal fees, agent fees, searches and survey fees and any necessary improvements to the property. Obtaining a fixed quote from a reputable firm with a breakdown of all the fees will allow you to plan your budget. It is hard to predict what the future holds – as we have seen this year, market circumstances can change overnight. But for now, the stamp duty holiday is an additional benefit that any prudent potential buyer should take advantage to get on to the property ladder while it is attainable. Our residential property team will be happy to help you.

This article was written by Amie Younger

Please note the contents contained in this article are for general guidance only and reflection the position at time of posting. Legal advice should be sought before taking action in relation to specific matters.

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