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Stamp Duty Holiday is a Welcome Leg Up for Home Buyers

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Thu 16 Jul 2020

Stamp Duty Holiday is a Welcome Leg Up for Home Buyers

There is never a dull moment in the Covid19 property market is there! 

As predicted in our April blog, millions adapted to working from home throughout the UK national lockdown period.  Online skills have increased for more of us so that we are able to work easily from home via the virtual world.  The lockdown period proved sufficiently long enough to force proactive change in the way we all work and learn so that the wheels of commerce and education were able to continue turning.  The recent easing of lockdown cannot now create a complete reversal to what we knew as “normal”. 

Hordes of Buyers Looking for Homes With Gardens

It is understood that we are well and truly in new territory now.  The property market recently opened for business and there are hordes of buyers seeking a move out of the cities to the countryside.  They are focused on continued home working for the long term but they are seeking open spaces like never before and are very specific about what they want in their local and residential environments.

Norfolk has many fantastic open and green spaces and Areas of Natural Beauty.  High in demand are family homes with garden space and homes with garden space in general.  Health and quality of life priorities feature highly and a surge of interest in relocation to rural areas is well underway.


Demand is Up for Homes to Buy in Norfolk

We have not seen a fall in property prices in the Norfolk area despite such predictions.  Considering the rapid shift to relocating to the countryside we still feel that a rapid rise in prices beyond the levels seen before the pandemic is not far off.

To help maintain a good balance and to keep the wheels turning smoothly, a steady flow of new property sellers are needed for the market.   A steady flow, rather than a surge is of course preferable for market stability and consistency. 

90% Mortgages Will Help First Time Buyers

Anyone purchasing a primary residential home from 8 July 2020 until 31 March 2021, up to the value of £500,000, will now be exempt from paying Stamp Duty.  In addition, the Nationwide Building Society are bringing back attractive 90% mortgage offers (no doubt with more lenders following suit).  These exciting developments reiterates our view that NOW is a great time to buy or sell.  Buyers save on tax and first-time buyers in particular are getting a real opportunity to jump on to the housing market with the benefit of no Stamp Duty costs and more accessible mortgage deals than seen for a little while.  Sellers have been seeing motivated buyers since the market reopened for business and there is no sign of any slowdown. 

Property Market Feelgood Factor is Up

All of this offers a feelgood boost to the property market and bodes well for a stable property market in 2021 if balance can be sustained from both buying and selling perspectives.

If the balance is not maintained then a false increase in property prices is probable, fuelled by growing demand outstripping supply.  In such a market, buyers will be forced to overstretch their budgets to land the house they want only to find they are out of pocket following a slump after March/April 2021. The worst case scenario is that there will be a significant flurry of transactions in the first quarter of 2021 followed by a slump from April 2021 as a response to too many vendors going to market in 2020 and a withdrawal of the Stamp Duty holiday.

SDTL Holiday Benefits All Main Residential Purchases

The benefit of no Stamp Duty costs applies to all primary residential purchases during the Stamp Duty holiday period and it is irrelevant whether the buyer is a first-time buyer or they have bought and sold countless times.  The only requirement is that the property will be their main residence.  Those fortunate enough to be able to buy over the £500,000 threshold will incur:

  • 0% SDLT on £0 to £499,999
  • 5% SDLT on £500,001 to £925,000
  • 10% on £925,001 to £1.5 million
  • 12% on any portion over £1.5 million

Investors and Second Home Buyers Benefit Too

Prior to the changes, second home buyers had to pay a basic rate plus 3% SDLT but now they also get to benefit from the Stamp Duty holiday.   Since the Stamp Duty holiday was announced second home buyers will pay a straight 3% over £40,000 up to the threshold value of £500,000 on their second home and:

  • 8% on the portion from £500,001 to £925,000
  • 13% on the portion from £925,001 to £1.5 million
  • 15% on the remaining portion over £1.5 million

These temporary changes will apply to corporations that look to buy residential property below the £500,000 threshold.  In addition, corporate residential property purchases of any value which qualify under the relief criteria can also benefit from the corporate 15% SDLT which should encourage those who can to invest. 

Second Covid19 Wave Could Still Happen

Popular opinion (science advisors too) says that the winter will see the UK hit by a second Covid19 wave.  Bearing this in mind, it is perhaps wise for those wishing or needing to move to seize the day and make a move while they can.  They currently have the opportunity to progress and complete a sale/purchase with a view to being settled by the autumn.  In the event that we do see another lockdown, it is highly likely to be localised to affected areas rather than the whole of the UK shutdown entirely.  Another point to remember is that lockdowns will be better managed as we have already adapted a great deal to the situation and everyone will be better prepared to cope with our “new normal” going forward.

However, it all plays out it will certainly be an interesting year ahead.  In the meantime, you might like to refer to the UK government guidance on this.   

Sheridan Sales and Lettings are happy to offer free advice to any home buyer or vendors about the Stamp Duty holiday and how it will affect them.  If you would like to learn more please do give us a call on 01366 858228 or email us on