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Will the stamp duty deadline trigger a house price crash?


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Almost a third of buyers will pull out if they miss SDLT deadline

https://propertyindustryeye.com/almost-a-third-of-buyers-will-pull-out-if-they-miss-sdlt-deadline/

A survey of people currently purchasing property suggests almost a third may pull out if they look likely to miss the stamp duty holiday deadline.

The Guild of Property Professionals surveyed more than 1,000 buyers last week and 31% said they would ditch their potential purchase if completion takes them beyond 31 March, when the holiday is due to end.

While there are over 140,000 more people in the process of buying a new home now than this time last year and an estimated 418,000 homes sales progressing to completion according to Zoopla, with many having been prompted by the stamp duty holiday, there are growing concerns over plans for the re-introduction of stamp duty in April 2021.

There are mounting fears that tens of thousands of property sales could collapse, as buyers struggle to beat the deadline, owed in part to delays in the conveyancing process, after the government confirmed that it “does not plan” to extend the temporary relief offered to property buyers via the stamp duty holiday.

Iain McKenzie, CEO of The Guild of Property Professionals, commented: “If the deadline remains as it is, only a quarter of the sales agreed in January will complete in time. With 140,000 more people waiting to complete sales than this time last year, there will be a significant number of buyers who will have to find additional money for stamp duty if they have not budgeted for it.

“Our hope, and the hope of 71% of the public, was that the government was going to extend the stamp duty holiday, or at the very least, introduce a phasing out period that will ease the pressure on all parties involved, and will prevent a cliff edge.”

More than a third – 38% – said that stamp duty had a big financial impact on the amount they paid, while a further 46% said it had a medium impact on their finances.

The research also found the average value of the property people had bought or were going to buy was £232,500, meaning the average house buyer would face a stamp duty bill of £2,150.

With a third aiming to push through a move quickly to take advantage of the holiday, McKenzie warns many would not have budgeted for this added cost.

He added: “If buyers are unable to complete because of not having the stamp duty money in place, we will see a large number of transactions fall through as a result. In fact, our research showed 83% of those who had moved this year said they would have been likely to cancel or postpone their house move if they had to pay stamp duty, which would have been a disaster for the property industry getting back on its feet after the initial lockdown.

“The signs are there, the stamp duty holiday has been successful, but we need to ensure a smooth transition back to a normal service."

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they will extend it at the last minute, in order to maintain the housing mania they need to maintain a sense of panic, which means only extending for a short time and announce it at the last minute 

rinse and repeat

in fact you can read a lot into how close they leave it to the deadline to extend it, if they announce it three days before, then that means they have left themselves room to extend it twice more, so the next extension will be two days left until deadline, then the last extension 1 day before deadline, they need to really keep the stress on, that's what's making people pay silly money 

its obvious.

no way will they end the furlough, or housing market props until Covid is behind us, if anything more 'help' is coming. 

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Had they an ounce of common sense they would use this as an opportunity to ditch all housing props and focus the money where it’s needed most. Who is really going to complain if they cancel the stamp duty holiday and abandon HTB to help pay for the massive debt run up due to the virus, or divert the money to the NHS or Care Home.

 

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they will extend it at the last minute, in order to maintain the housing mania they need to maintain a sense of panic, which means only extending for a short time and announce it at the last minute 

It's possible, and perhaps on form, but I doubt it this time.

Furlough isn't the same as a stamp duty holiday. The only 'calls' for this to happen are from property VIs who want to continue the boom. No other parties or MPs are demanding this so there's no political pressure. Furthermore, the stamp duty holiday seems to be the only coronavirus policy response they're not boasting about at every opportunity, and I think they actually regret introducing it in the first place as it's now gotten out of hand with this mini-boom. 

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Perhaps people are banking on it being permanent, or at least for a long enough time that HPI with out-weigh what they overpaid even when saving stamp duty

if they were to re-introduce it then it takes a low risk of short term negative equity to a high risk of medium term negative equity 

 

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Had they an ounce of common sense they would use this as an opportunity to ditch all housing props and focus the money where it’s needed most. Who is really going to complain if they cancel the stamp duty holiday and abandon HTB to help pay for the massive debt run up due to the virus, or divert the money to the NHS or Care Home.

 

Those with a property empire, which just happens to be most of them and their mates, that’s who.

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You cant have a crash if youve not bought the house.

Theres no chance of completing by March now.

UKGOV have stated the deadline will not be extended.

I reckon that the houses sold in 2020 will be 20% down on the already very low 2019 figures.

 

 

 

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I think what Sunak will do is say that people only need to have exchanged contracts by March 31st. I think he will make this announcement early in the New Year to give the market legs during the next lockdowns, however, I think that many people who were going to buy, have already bought, and that very few new purchases will go through due to any extension. It does make sense to make it on exchange of contracts, rather than creating an administrative lottery.

Personally I think a mutant strain that is resistant to the vaccine will kill every asset market at some point in the New year. This will be followed by more QE, more UBI more socialism, and the destruction of everything that was good about ours lives, then the rising up of the masses in protest, with politicians heads on spikes, so buying a house will become somewhat of a minor thing.

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It amazes me that the purchase of a quarter of a million pound asset could be hampered for the sake of a couple of grand. If you don't have that sort of money available, should you really be doing this in the first place?

You need to add in gearing up the deposit with mortgage. If you put aside 10k for SD, that then becomes 40k of geared up money to buy a nicer house than you could previously.

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Struggling to believe they won't extend the SD period. Just look at the last minute u turn including yesterday's tier 4 announcement in the S.E and London. Get people spending and planning before Xmas and then cancel last minute. 

Before the stamp duty holiday, the property VIs were screaming to extend Help to Buy in April, when it is due to remove eligibility for existing owners. The argument was that since house sales and construction were halted in the first lockdown then 3+ months were needed to make up for the lost time. 

This is actually reasonable. However the VIs are no longer interested in getting Help to Buy extended - they're far more focused on chasing the greater prize of keeping stamp duty removed. In all subsequent lockdowns, construction has continued and EAs remained open so there's no excuse to extend stamp duty owing to disruption. 

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Precisely, Rishi “10 homes” Sunak has lots of property. It is a massive conflict of interests him being in any position of power at all.

Sunak isn't the only Conservative poltician to own lots of property. They all do. Cameron owned so many homes that on one occasion when asked to number them he couldn't.

You voted from them both.

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The stamp duty holiday is a back door bail out for the banks, it’s just less obvious 

without the housing boom, sentiment would be much worse, HPC would be real and it would all compound on top of each other.

The choice is either turn the engine on on the speedboat even if the throttle is stuck on full, or wash over the waterfall

 

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Took us 5 months to complete after 2nd offer accepted (awful survey).

So anyone whose not already 2 months in conveyancing is more likely stuffed than not.

NB it took 5 months to buy a vacant possession bungalow from rented & 30% deposit.

Yeah. Granted we're at the bottom of a chain of four houses but we had our offer accepted in mid September and someone in the chain is still awaiting searches which aren't due back until mid January.

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It's possible, and perhaps on form, but I doubt it this time.

Furlough isn't the same as a stamp duty holiday. The only 'calls' for this to happen are from property VIs who want to continue the boom. No other parties or MPs are demanding this so there's no political pressure. Furthermore, the stamp duty holiday seems to be the only coronavirus policy response they're not boasting about at every opportunity, and I think they actually regret introducing it in the first place as it's now gotten out of hand with this mini-boom. 

Yep.

Nothing screams we are in this together when most are loosing money and/or jobs and fo some bizarre reason property goes up.

Am i supposed to feel warm and fuzzy when a meh 4 bedder goes from 350 > 550.

At this time the conservatives are out so imho they are better off letting the market slide now (brexit/Corona) and then juicing it nearer the election after say a 20% fall once the virus has reduced then the stimulus will get more bang for the buck.

Its very poor optics for the residential market to have on one page articles about 20 million £ homes and the other an agent begging for more money ergo holding two contradictory positions at the same time.  

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Yep.

Nothing screams we are in this together when most are loosing money and/or jobs and fo some bizarre reason property goes up.

Am i supposed to feel warm and fuzzy when a meh 4 bedder goes from 350 > 550 when folk are locked down it reeks.

At this time the conservatives are out so imho they are better off letting the market slide now (brexit/Corona) and then juicing it nearer the election after say a 20% fall once the virus has reduced then the stimulus will get more bang for the buck.

Its very poor optics for the residential market to have on one page articles about 20 million £ homes and the other an agent begging for more money ergo holding two contradictory positions at the same time.  

 

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