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Stamp duty holiday extension likely as 100,000 buyers will miss deadline

About 100,000 buyers already agreed to complete will miss the stamp duty holiday deadline leading many to expect an extension.

Delays in completing purchases agreed last year has resulted in 100,000 first time buyers and home movers likely to miss the 31 March deadline according to Rightmove.

Buyers will face the full stamp duty tax due on the purchases even though they agreed to complete before Christmas and it is likely that the Chancellor Rishi Sunak will extend the holiday to June 2021.

House prices have reduced for the previous three months and surprisingly increased by 0.5% or £1,522 in February with average asking prices at £318,580.

Fewer sellers in the market

The number of sellers listing new properties has reduced by an average of -21% during February compared to this time last year whereas properties with two bedrooms or less are lower by -16%.

The top of the ladder and home movers sector with three bedrooms have reduced the most by -25% due to families managing home-schooling, working from home avoiding more disruption.

This table from Rightmove shows average UK asking prices (excluding London) for January and February 2021 for each sector and monthly change.
Sector February January
Change
First time buyers £200,692 £200,578 +0.1%
Second steppers £290,119 £288,752 +0.5%
Top of the ladder £561,858 £562,543 -0.1%
With the lower supply of suitable properties average asking price for the second stepper sector has increased by 0.5% or £1,367 to £290,119.

The lack of new homes and ongoing lockdown could mean remortgage buyers remain where they are and release capital from their property which they can use to add more room, such as a loft conversion.

See how much your payments would be by remortgaging your property and releasing capital at this link:
Remortgage calculator with instant results and figures for your new mortgage.

There could be fewer larger homes on the market as the equity release buyer can avoid downsizing and use a lifetime mortgage to access money such as to repay an interest only mortgage or give to a family member.

Buyer activity increasing in 2021

The level of buyer demand is higher at the start of 2021 compared to last year, says Rightmove, with 7% more purchases agreed despite there not being time to complete before the stamp duty deadline.

There are other reasons for homeowners to move such as their current property having limited indoor and outdoor space should work practices change in the future.

The changing demand for types of property means buy-to-let investors may need to change their portfolio to reflect the new needs from the rental market.

Enquiries from prospective buyers to estate agents is up 18% with visits to Rightmore higher by 45% and higher buyer demand exceeds supply helping to push up house prices.

As the number of people vaccinated increases during the year and lockdown measures lifted the supply of properties is likely to return to normal levels by the summer.

What are your next steps?

Talk to our London City Mortgage brokers for advice if you remortgage your existing home and want the best mortgage deal or release capital, buying your first home, moving home or a buy-to-let investor.

Start with a free mortgage quote or call us and we can take your details. Learn more by using the equity release calculator, mortgage monthly cost calculators, and property value tracker chart.

For older homeowners releasing equity from your property, our LCM mortgage advisers can recommend the best options with our lifetime mortgage quote, accessing wealth for a conservatory extension or even buy a more expensive home.


Mortgage Best Buys

These are examples of mortgage products we can approach with many more offering interest rates and flexibility to meet your needs.

1.17% Fixed Rate
60% Loan to Value
£1,025 App Fee
Until 31/09/2022
Reverts to 3.59%
1.18% Fixed Rate
60% Loan to Value
£1,034 App Fee
Until 31/10/2022
Reverts to 3.59%
1.19% Fixed Rate
60% Loan to Value
£999 App Fee
2-Years Time
Reverts to 3.59%
1.16% Fixed Rate
60% Loan to Value
£1,525 App Fee
Until 01/11/2022
Reverts to 4.09%

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