As house buyers continue to flock to an already overstretched property market, fears continue to grow that many of those buyers seeking to benefit from the stamp duty holiday won't be able to complete in time, even if they're agreeing a sale at this very moment. The house buying process, from putting in an offer to securing the best mortgage rate and conveyancing, takes months, and is currently significantly longer than normal.
Research by estate agent comparison site GetAgent.co.uk estimates that as many as 325,000 property sales agreed between now and January 2021 are at risk of failing to complete by 31 March. This is largely due to a colossal backlog of property sales going through the system, with no sign of the pressure abating sufficiently for the applications to clear fast enough.
The figures show that with England accounting for 97 per cent of transactions, 315,534 sales could be impacted, while this drops to 9,466 in Northern Ireland. With a current average house price of £261,795 across England, the 315,534 homebuyers who find themselves in property transaction limbo would pay no stamp duty as a result of the current holiday; if they were to complete before next year’s March deadline, that is. The same applies for the 3,030 homebuyers waiting to complete in Northern Ireland with property prices currently averaging at £143,205.
If these house sales were to fail to complete on time, house buyers could face a total of £978,130,097 in stamp duty, the majority of it payable in England. Those buyers whose house purchase is a bit of a stretch and hinges on the stamp duty saving will be particularly nervous; potential buyers who have not yet put in an offer should take note of this situation and avoid a nerve-wracking, months-long wait to find out whether their house purchase is still going to be within their means. Founder and CEO of GetAgent.co.uk, Colby Short, commented:
'Although the current stamp duty holiday has worked wonders in terms of reviving the property market, it has also presented its own problems for the industry.Such a heightened level of market activity has caused a huge backlog of sales waiting to complete and a large number of these transactions are predicted to miss next year’s stamp duty deadline altogether.
'As a result, many buyers could find themselves hit with an unexpected stamp duty bill having already stretched that little further during the offer process under the intention they would be saving this sum.
'It’s yet a further warning to those looking to buy to not overstretch themselves financially, whether it be with the expectation of paying no stamp duty, taking advantage of low-interest rates, or otherwise.'