The housing market is red hot and the pandemic has encouraged people to embrace the Latin aphorism carpe diem. They are indeed “seizing the day” and getting on with dreams of moving but estate agents, already run off their feet, now face fresh angst.
Buyers and sellers are pushing to secure deals and hurry them through the legal system before the stamp duty holiday, on all homes sold for £500,000 and under, ends on March 31 next year.
The tax break also benefits those buying above that threshold. Those purchasing a main residence for over half a million pounds will pay no stamp duty on the cost up to £500,000. On anything above, there will be a five per cent levy on the next £425,000 or less, followed by 10 per cent on the next £575,000 up to £1.5m and then 12 per cent stamp duty on the portion above £1.5m.
So, the tax holiday adds up to a considerable sum as those buying a home for £500,000 or more will now save £15,000. This is proving to be a big incentive and while six months sounds like ample time to take advantage of it, the reality is that the clock is ticking.
That is because the system is struggling to cope. The process of conducting viewings is now more onerous due to Covid protocol and there aren’t enough surveyors and conveyancers to cope with the rush of transactions and bottlenecks that have already formed. It is taking at least three months plus for uncomplicated transactions to complete.
Estate agent Simon Blyth has already predicted that there could be“pandemonium” in January and February with a new rush of buyers and sellers hoping to beat the March 31 deadline.
So, for those hoping to buy, sell or both by March 31, 2021, there are some tips below and if you feel you may fail to meet the stamp duty holiday deadline, independent property consultant Alex Goldstein has words of comfort: “Vendors and buyers are getting wound up in the buzz surrounding the tax saving but rushing into a decision just to save on stamp duty could have disastrous results. You may make a pressured choice and will have to live with the consequences if you get it wrong. I suggest taking your time even if that means paying the standard rate of stamp duty.”
Advice for buyers
*Proceedable buyers have the best chance of getting the home of their dreams. So, if you need a mortgage to buy, make yourself look attractive and save time by securing a mortgage deal in principle from a lender so that you are ready to go when you find the right property. Also identify which surveyor and conveyancer you will use and make sure they are good and know the area.
*Be nice. Some would disagree with this strategy but flattery will help endear you to the seller so be honest and tell them what you love about their home and save any relevant criticism for the feedback you give the estate agent.
*Do not haggle too hard on price in a hot market and if you do, make sure you can justify it. This is not the time for a “cheeky offer” unless the property has languished on the market for months and really is overvalued. There is likely to be another buyer behind you in the queue who is prepared to pay the asking price.
When you make a bid, say you would like a quick response so there is no time for other would-be buyers to come in higher.
Advice for sellers
Appoint a good estate agent even if they are not the cheapest or don’t price your home as high as others. They will know the area and will value your home correctly. They will also get the right buyers through the door by vetting them and they will help you push a sale through the system, which is vital if you are planning to buy another home or need your money out of the property.
Price it right. Independent property consultant Alex Goldstein says “It is a very fine line to walk, however price is increasingly important in this competitive and still price sensitive market. You can set your price on the more enthusiastic side and could be lucky in securing a buyer at this level. However, with mortgage lenders and valuers being so twitchy at the moment, you could be faced with a down valuation and time delays as a result. Also, if the price is too optimistic, then you won’t get the viewings.”
Appoint a good conveyancing solicitor. Alex Goldstein says: “Ensure that yourself and your buyer are using rock solid conveyancing solicitors. Check their reviews online and ensure they are not part of a mass-volume, call centre. If one side has a below par solicitor, everything will grind to a halt, no matter how much money the buyer is offering.”
Pictures sell properties. Now, more than ever, it is imperative that you find an agent who will arrange for good quality pictures to be taken of your home as this will both inform and tempt buyers. Ditto floorplans. Do not touch an agent who cannot be bothered to do them.
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