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Stamp duty holiday to be extended by three months

The stamp duty holiday will be extended by three months to the end of the June, The Times reports.

While it was reported that ministers would opt for a six-week extension for those already in the process of buying a house, mortgage lenders apparently told ministers this would not be long enough to stop sales falling through.

It seems likely the extension will just be for those already in the process of buying a house, or who have received a mortgage offer by a particular date.

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An announcement on stamp duty will likely be made when Chancellor Rishi Sunak delivers his budget on March 3rd.

Rob Houghton, chief executive of reallymoving, said: “This policy has been critical in keeping the housing market moving through the pandemic but I would urge the government to restrict this extension to buyers already in the conveyancing process – so those who have had their offer accepted and appointed a solicitor to undertake the conveyancing work.

“This gives buyers who began their homebuying journey in good time but have been subject to delays, a new window to complete.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

“While the holiday has been helpful for second steppers and those higher up the ladder, it has also caused prices to rise dramatically over the last year at the expense of first-time buyers.

“They have faced greater competition for homes, price increases and a restricted mortgage market – which led to a 12% fall in the proportion of first-time buyers in the market in the second half of 2020.

“Encouraging a new rush of buyers into the market could once again have a detrimental effect on first-time buyer share which has recovered strongly since the start of the year, back up to 58% of transactions from a low of 46% last September.”

BY RYAN BEMBRIDGE

Source: Property Wire

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House prices record surprise jump despite looming stamp duty deadline

UK house prices recorded a surprise jump this month as buyers were undeterred by the looming stamp duty holiday deadline.

After three consecutive monthly falls the average price of property coming to market increased 0.5 per cent – or £1,511 – this month.

The number of new buyers has continued to grow despite the fact that it is now too late for most to beat the stamp duty deadline of 31 March.

Meanwhile, one in five buyers who agreed a purchase in July last year have still not completed, with an estimated 100,000 buyers still likely to miss out on their expected tax saving, according to Rightmove data.

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High demand is also outstripping supply and pushing up house prices. New seller numbers are down 21 per cent on the previous year as family home owners delay coming to the market, with experts suggesting it could be due to homeschooling distractions.

Tim Bannister, Rightmove’s director of property data, said: “Last year the market was unexpectedly buoyed by buyers’ determination to move and satisfy their new lockdown-induced housing needs.

“We may well be seeing a continuation of that this year. Rightmove’s early 2021 buyer data shows that despite the imminent end of the stamp duty incentive, all of the key buyer metrics are ahead of early 2020, itself an active period as the market was boosted by the post-election ‘Boris bounce’.

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“As well as the current lockdown motivating buyer demand again, the restrictions have also been a factor in limiting new supply, leading to some modest upwards price pressure. These are strong signs that new buyer demand is not facing a cliff-edge after the 31st of March.

“It remains to be seen if this momentum will be enough to make up for the removal of the stamp duty savings that are benefitting many buyers and have been adding a sense of urgency to the whole market.”

By Jessica Clark

Source: City AM

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BTL Landlords to build portfolios beyond 31 March

Buy To Let landlords are undeterred by the looming stamp duty holiday deadline and intend to continue purchasing rental properties beyond 31 March, a survey by Foundation Home Loans has revealed.

Research by the intermediary-only specialist lender has revealed of the 16% of landlords who said they were going to purchase over the next 12 months, 48% said they would do so in Q1, 41% in Q2, 28% in Q3, and 29% in Q4.

Landlords were able to pick more than one quarter if they were unsure when they might complete.

The landlord research – undertaken by BVA BDRC and carried out between December and January with the results based on 846 online interviews – also found landlords seemed confident about their ability to complete purchases before the deadline. Only 14% said they would abort their transaction if completion did not look achievable.

Of those landlords intending to purchase in Q1, 65% said they were very or quite confident they would complete by the 31 March.

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Extending the deadline

When asked whether they believed the government would extend the deadline, 28% said yes, while 31% disagreed, although the questions were asked before the recent Parliamentary debate on the stamp duty holiday.

There has been growing industry support for a tapering of the deadline to allow those already within the purchase process to complete beyond the deadline date but still secure the tax saving.

Only 4% of those surveyed said they were purchasing because of the availability of the stamp duty holiday. Meanwhile, 25% of those intending to purchase in 2021 said they were holding off buying as they believed property prices were currently inflated.

The most recent house price index from Nationwide for January revealed that prices had dropped slightly by 0.3% month-on-month, and annual house price growth had slowed from 7.3% to 6.4%.

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Foundation’s research suggests landlords will look at slight house price drops throughout the year as an opportunity to add to portfolios.

George Gee, commercial director at Foundation Home Loans, said: “As we know landlords think long and hard before adding to their portfolios and, as our research reveals, they are unlikely to just confine any purchase activity to the first quarter of this year in order to simply benefit from the stamp duty holiday.

“There are a number of positive results to come out of our exclusive research, not least landlords’ continued intention to keep on purchasing after the deadline has passed, and the news that many landlords will not abort their transactions if there is no extension and they look unlikely to complete by the 31 March.

“In that regard, the next month-and-a-half are very important for the sector. Foundation has put in place significant extra resources to our completions team in order to ensure we can complete as many cases as possible by the end of March.

“Looking beyond Q1, there will clearly be ongoing opportunities for advisers active in the landlord borrower space, and all the signals point to significant activity taking place in both the purchase and remortgage sectors.

“We should not forget that many landlords’ special rates are coming to an end over the months ahead, especially those that bought prior to the last stamp duty surcharge increase for additional homeowners back in Q1 2016.”

Foundation relaunched its entire buy-to-let product range last month, with rate reductions across the board, and last week launched new Limited Edition two-and five-year fixed rates with reduced fees for those landlords purchasing or remortgaging via a limited company vehicle.

Source: Mortgage Finance Gazette

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Stamp duty holiday extension to be debated in parliament

The government will be forced to debate the stamp duty holiday, after more than 115,000 people signed a petition calling for an extension.

Rightmove has estimated that, as it stands, more than 100,000 people will miss out on the stamp duty holiday, seeing as the market is movingly more slowly than usual.

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The stamp duty holiday means that people don’t have to pay stamp duty on the first £500,000 of a property purchase, saving up to £15,000.

Any petition signed by more than 100,000 is obliged to be debated in parliament.

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The government has previous said that it has no plans to extend the holiday.

It responded on the 10th December: “The SDLT holiday was designed to be a temporary relief to stimulate market activity and support jobs that rely on the property market. The government does not plan to extend this temporary relief.”

BY RYAN BEMBRIDGE

Source: Property Wire

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House hunters race to beat stamp duty deadline

In the Chancellor’s spending review yesterday, it was revealed that the stamp duty holiday would not be extended and will come to an end on 31 March next year. New data from online mortgage broker Trussle shows where in the UK house hunters can still begin a property purchase and make the stamp duty deadline.

These areas include West Midlands, South West and North East.

The median number of days from starting a mortgage application to completing a property purchase is around 115 days.

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This means that the 6 December 2020 marks 115 days before the stamp duty holiday deadline.

As a result of the coronavirus pandemic, there have been significant delays to mortgage applications and the average time from mortgage submission to approval has increased by 50% since this time last year (from 16 days to 24 days).

The data by Trussle also shows that average time from application to completion differs by property type depending on detached, semi-detached, terraced or flat.

Currently they are faster in Scotland and the South East and slower in the East Midlands and East of England.

According to the data, flats take an average of 120 days to complete whilst semi-detached properties take 108 days on average.

Trussle has also identified the top five fastest lenders in the UK based on its data, finding that on average lenders take around 20 days to approve new mortgage submissions.

These lenders were Barclays (10 days), Halifax (14.5 days), BM Solutions (17 days), Coventry Building Society (18 days) and HSBC (19 days).

The time to approve mortgages has increased significantly since the start of the coronavirus pandemic.

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The average was closer to 10 days in 2019 and up until June 2020.

Miles Robinson, head of mortgages at Trussle, said: “The stamp duty holiday deadline is looming, which is understandably causing concern.

“There are delays across the market and we are urging buyers not to delay their mortgage application if they want to take advantage of the stamp duty holiday before the holiday ends on the 31 March next year.

“We hope that this guidance provides helpful timelines for those in different regions across the UK.

“We must also advise that those looking to buy a new home should make sure they budget enough to pay the stamp duty land tax, just in case the purchase does not complete before the deadline.

“If a buyer were to pull out after they’ve already exchanged, sellers may be in a position to sue for consequential loss at this point, and buyers may lose their deposits.

“This is going to cause a lot of stress and uncertainty for customers over the coming months, and we’re urging all buyers to take the necessary preparations.”

By Jessica Nangle

Source: Mortgage Introducer

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Property viewings up 30% in July

Property instructions and viewings were up in July following the stamp duty holiday, according to data published by property group Andrews.

Viewings saw a monthly increase of 29% in July, with physical viewings up 45% as buyers returned to the market. There were almost 6,000 viewings in July compared to just 20 in April, with a third of those viewings still being carried out virtually. Offers made and accepted by sellers were also up 12% in July. Instructions were up by more than a fifth (22%) from June, with valuations up by a third.

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David Westgate, group chief executive at Andrews Property Group, said: “What a difference four months makes. In April viewings and instructions across the industry fell off a cliff as the country was gripped by coronavirus and the Government asked us to stay at home. But the rebound has been swift as lockdown eased and the Chancellor’s stamp duty announcement at the start of July gave the market a timely boost.

“Buyers and sellers alike have shown renewed vigour in the past six weeks. With a lengthy window of opportunity to purchase before the stamp holiday comes to an end, we expect buyer activity to remain buoyant over the coming months. And we saw an immediate uplift in valuations and instructions since stamp duty was frozen, with sellers keen to take advantage of motivated buyers and more confidence to list thanks to stable house prices.

“It won’t be all plain sailing from here, but the Government has shown how important it sees a healthy and stable property market for the general wellbeing of the overall economy. And house prices have proven to be extremely resilient in the past when faced by strong economic headwinds, which suggests the market is well placed to cope with some potentially heavy bumps in the road ahead.”

Source: Property Wire

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RICS: Stamp duty holiday helping to lift demand

The stamp duty holiday introduced from the 8th July is helping to lift demand, The RICS UK Residential Market Survey suggests.

In July a net 75% of surveyors saw a rise in new buyer enquiries, the second month in a row that demand has rebounded significantly. A net 59% also saw instructions rise, up from 41% in June.

RICS noted that the stamp duty holiday is having a big impact on demand based on anecdotal evidence.

Ross Counsell, chartered surveyor and director at property buyers, Good Move, said: “Today’s RICS statistics reveal the UK housing market gained further momentum last month which showcases the ongoing recovery – something we’re all happy to hear after a turbulent few months.

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“We have seen an increase in new buyer queries, as well as a rise in new listings and sales. The measurements employed by the government such as the stamp duty holiday has positively impacted this spike.

“These latest statistics should hopefully help reassure buyers and sellers in the UK that the property market is starting to return to “normal”.

“However, we must not forget that we are now in a recession, therefore we advise buyers who are looking to purchase a home during the recession to thoroughly check out the property before they commit, and ask important questions such as how much work the property may need to ensure they’re protecting their finances and getting the best possible deal.

“Buyers must not get swept away in a low house price or jump at the first-rate a mortgage lender offers. Purchasing a home during this time is a big decision and one that needs to be thought about carefully.”

A net 26% of surveyors expect an increase in sales, however a net -10% expect sales to tail off over the course of the next 12 months – likely due to the stamp duty holiday expiring in March 2021.

Tomer Aboody, director of property lender MT Finance, said: “With the stamp duty holiday in place at least until March and hopefully longer, this should help support the housing market to a degree.

“No doubt there will be some negativity and a potential fall in confidence after government schemes such as furlough have ended but a possible downward trend should be eased by banks already preparing a loss buffer (HSBC), allowing them to work more closely with borrowers who might be struggling with repayments.”

BY RYAN BEMBRIDGE

Source: Property Wire

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Stamp Duty holiday and falling mortgage costs provide timely buy-to-let boost

After years of cracking down on landlords, the chancellor’s Stamp Duty holiday is a shot in the arm for the industry.

It’s not been an easy few years for the nation’s landlords.

A succession of decisions by the Government has chipped away at just how attractive it is for people to invest in property, particularly if they want to do so on a small scale and have maybe one or two buy-to-lets in a portfolio.

But a couple of recent changes may have made the prospect far more enticing.

Say goodbye to Stamp Duty (for now)

It was no great surprise when the Chancellor stood up in the House of Commons to announce a Stamp Duty holiday.

The nil rate threshold is temporarily being hiked from £125,000 to £500,000, meaning that nine out of every 10 buyers in England and Northern Ireland won’t have to pay any.

The surprise came in the revelation that this is being applied to landlords as well as those buying a property they intend to live in themselves.

Just a few years ago a higher rate of Stamp Duty was introduced for those buying a second home, in a bid to make buy-to-let less appealing (or more profitable for the Government, depending on your point of view).

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While this 3% surcharge still applies ‒ landlords can’t avoid Stamp Duty entirely ‒ it does mean they will enjoy smaller Stamp Duty bills as a result.

For example, before the changes, if I wanted to buy a £250,000 investment property I would pay 3% on the first £125,000 and then 5% on the remainder, meaning a total tax bill of £10,000.

That tax bill will now drop to £7,500, a tidy saving, especially if you’re looking to buy more than one investment property.

Falling mortgage costs

Another significant source of optimism for all would-be property investors has been the shifting state of the buy-to-let mortgage market.

Perhaps unsurprisingly, the number of buy-to-let mortgages on offer has dropped significantly as a result of the Covid-19 crisis.

According to data from financial information site Moneyfacts, the number of buy-to-let deals stood at 2,897 in March, but had crashed to just 1,455 in May.

The reopening of the housing market has led to a rise in the number of products on the market though, with product numbers jumping to 1,738 in July.

Still a long way down on the pre-pandemic, but a clear move in a more positive direction.

It’s not just the numbers of products that are likely to give landlords hope though, but the rates being charged on them too.

Moneyfacts data shows the average rate on two-year fixed rate buy-to-let deals in March stood at 2.77%, while on five-year deals it was 3.24%.

By July, this had fallen to 2.61% and 2.97% respectively.

Part of this will be down to the fact that lenders are far warier about lending at higher loan-to-values currently.

But equally, now that the market is moving again, lenders will want what business there is. And that competition will likely feed into some decent deals for landlords.

Jenny don’t be hasty

That said, there’s no doubt that moving into buy-to-let at the moment could be a nervy move.

Yes, there remains healthy demand for rental properties ‒ the shortage of housing hasn’t disappeared, and while people will struggle to purchase their own home, they will have to rely on rental properties.

But taking on any tenant is a big gamble at the moment. With significant unemployment seemingly on the way, how confident can you truly be that they will be able to maintain their rental payments?

There’s only so much due diligence you can do on a tenant ‒ you can’t really have a chat with their boss to find out what the chances of them getting the boot in the next year are.

Fortune favours the brave

Landlords are often painted as the pantomime villains of the housing market, a little unfairly in my view.

But the truth is that the Stamp Duty holiday is a real boon for investors, who could also benefit from lender competition and enjoy cheaper funding when purchasing their next buy-to-let property.

The big test will be just how robustly they run the rule over prospective tenants, to ensure they don’t end up with costly void periods. It doesn’t matter how much you saved on your Stamp Duty bill or mortgage, if you end up with an empty rental property.

By John Fitzsimons

Source: Love Money

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Stamp duty holiday: What does it mean for the UK housing market?

In a “mini-budget” spring statement tomorrow chancellor Rishi Sunak is expected to announce a range of measures to boost the economy which has been ravaged by the coronavirus crisis.

As part of the package the chancellor is reportedly planning to cut stamp duty for properties worth up to £500,000 in a bid to reinvigorate the housing market after it was brought to a standstill by the coronavirus lockdown.

Data published this morning by Halifax showed that UK house prices fell for the fourth month in a row in June – the first time since 2010.

Estate agents and property industry groups have been urging the government to grant a stamp duty holiday throughout the coronavirus crisis, in a bid to encourage nervous buyers.

The Royal Institution of Chartered Surveyors (Rics), Knight Frank and Zoopla were among those in the sector to call for a cut to stamp duty.

What is a stamp duty holiday?

Stamp duty is a tax paid by property buyers, and the amount paid depends on the area of the UK, the value of the property or land and whether or not you are a first time buyer.

In England and Northern Ireland buyers pay the tax on properties sold for more than £125,000, although first-time buyers only pay stamp duty on deals worth more than £300,000.

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For non-first-time buyers the tax is two per cent up to £250,000, five per cent up to £925,000, 10 per cent up to 1.5m and 12 per cent above £1.5m.

Sunak is expected to say he will raise the property tax threshold to as high as £500,000, four times its current level. That would exempt most homebuyers from paying any stamp duty for up to a year, the Times reported.

Who would benefit from the changes?

Experts said that buyers with big deposits that are looking to purchase a home in a more expensive area will benefit the most from the tax cut. First-time buyers could benefit depending on where they are looking to buy a house.

Legal & General Mortgage Club director Kevin Roberts said: “The latest stamp duty holiday proposals look to be another step in the right direction and make for positive reading for first-time buyers.

“Our new research suggests that first-time buyers could be the engine that drives the housing market forward this year, with 93 per cent still planning to purchase a property in 2020.

“A stamp duty holiday would bring more savings to these people planning to step onto the ladder. Our research revealed that many prospective homeowners have already been managing to save extra during the lockdown – an average of £107 a week in fact.”

However, Rightmove property expert Miles Shipside said that a stamp duty holiday would not benefit most first-time buyers without better mortgage availability.

Rightmove’s Property Expert Miles Shipside said: “Buyers in higher priced areas with bigger deposits would benefit most if the stamp duty threshold was raised to £500,000.

“If it is included in the summer update it needs to be made clear what it would mean for people home hunting or currently going through the conveyancing process right now, as an announcement now that doesn’t come into play until the autumn will only lead to people delaying their plans.”

“There have been similar packages in the past which were focused on people buying their first home, but the suggestions are that this new proposal will be for all buyers,” Yorkshire Building Society’s strategic economist Nitesh Patel added.

“This will benefit homeowners looking to upsize and downsize, as well as first-time buyers in high-value areas.”

What would a stamp duty holiday mean for the UK housing market?
Property experts anticipate that tomorrow’s announcement could boost housing activity, although they warned that changes must be implemented straight away to avoid buyers holding out until autumn.

Yorkshire Building Society’s strategic economic Nitesh Patel said: “We have yet to see the full details of a stamp duty holiday package, but if the speculation is correct then buyers purchasing a property of up £500,000 from the Budget announcement in the Autumn stand to save between £10,000 and £15,000 – which is a substantial amount and should boost housing activity.

“But, it would be even better if the changes came into force straight away rather than waiting until the Autumn.”

Patel added: “ Mortgage rates are near to record-lows, which is also likely to help the housing market over the coming months, particularly for those buying more expensive properties. I would also expect more homes to come on to the market, particularly around this price bracket, as the stamp duty cut would improve the saleability of their home.”

Bricks & Logic founder Matthew McDwyer added: “We may not see an immediate spike in asking prices to the level we saw in 2015, but it will definitely support the market and we will perhaps see slight price increases for the cheaper to middle range of the market.”

“However, any reduction in stamp duty on second homes or investment properties could spike new demand from overseas investors or landlords,” McDwyer said.

By Jessica Clark

Source: City AM

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RICS and NFB call for stamp duty holiday

The Royal Institute of Chartered Surveyors (RICS) and the National Federation of Builders (NFB) have called for a stamp duty holiday once the lockdown ends.

RICS members are expecting house prices to fall over the next 12 months – but the organisation said temporarily removing stamp duty would help quickly get the market running again.

Hew Edgar, RICS head of government relations, said: “RICS is not an organisation that would call for a stamp duty holiday on a whim.

“As we start to emerge from this crisis, however, it is likely that the finances of potential homebuyers will be under strain, and the burden of stamp duty could put buyers off.

“For those who can afford to move they may lack confidence in the market, adding to the slow down.

“A stamp duty holiday could be one of the ways to reactivate the housing market quickly as a short term measure.”

Afterwards the NFB backed the call.

Richard Beresford, chief executive of the NFB, said: “A temporary stamp duty holiday would encourage new build sales and release some much needed cashflow back to our struggling housebuilders.

“It would also ensure vital businesses, such as surveyors and conveyancers, are able to continue operating in these difficult times. We support it.”

The National Federation of Builders also backed are campaigns to defer planning contributions and council tax on vacant new builds, as well as extend planning permissions by 12 months.

Rico Wojtulewicz, head of housing and planning policy at the House Builders Association (HBA), the housebuilding division of the NFB, said: “Housebuilders, many of whom are struggling to get lending from the government CBILS scheme, are still expected to pay bills, their staff and the supply chain but with reduced or no revenues.

“A temporary stamp duty holiday is another immediately deliverable solution that the government should pursue.

“Any delay in increasing support to our industry will see businesses go to the wall and once one goes, the domino effect will be striking.”

BY RYAN BEMBRIDGE

Source: Property Wire