In his budget on 3 March 2021, the Chancellor announced a further concession on Stamp Duty Land Tax (SDLT) effectively extending the holiday on duty up to £500,000 until 30 June followed by a new tapered rate coming into force from July to September 2021. Hopefully this will avoid, what many perceive as, a cliff edge end to the stamp duty holiday previously due to have come to a close on 31 March.
The temporary increase in the nil rate band for residential purchases in England and Northern Ireland has been extended in the following manner, namely: –
- The £500,000 nil rate band will be in place until 30 June 2021;
- A nil rate band of £250,000 will be in place between 1 July 2021 to 30 September 2021;
- The nil rate band will return to standard amounts of £125,000 from 1 October 2021.
- First time buyer’s relief, which has no effect while the nil rate band is £500,000, will resume from 1 July 2021;
- The SDLT online calculator has been updated for the new rates of SDLT.
The view of Grower Freeman from previous experience is that this will further fuel the first and second time buyer residential market by both increasing activity and values. As has always been the case, this will have a knock-on effect on more expensive residential property. Over the past three to six months we have seen an increase in activity amongst clients both acquiring and selling properties in the outer suburbs of London and the Home Counties, where we understand from data which we have received the prices have increased, as opposed to their being static, or if anything reducing in value in respect of houses and, in particular, flats in both central and inner London suburbs. Consequently, you may wish to consider these factors when evaluating your personal portfolio/property investments.
Coupled with our comments above, the Chancellor also announced that the Government will back a new mortgage guarantee scheme to provide a guarantee to lenders across the UK who offer 95% mortgages on homes costing up to £600,000. According to the data from RightMove, this accounts for 86% of all homes currently up for sale in the United Kingdom and is likely to encourage more people to enter the property market and thus increase demand for homes.
At Grower Freeman we have an energetic team, experienced in all levels of property transactions who will be happy to assist and advise you.