Anyone who's been following the UK property market will know that the current mini-boom in the housing sector – with its boosting effect on house prices – is in large part due to the stamp duty holiday introduced by the government in order to prop up the property sector.
Recent research by MoneySuperMarket reveals the extent to which the stamp duty holiday has been responsible for the surge in house sales – and the delays that have been plaguing a system barely able to cope with the intense demand.
With the average property purchase now taking 123 days to complete, buyers wishing to benefit from stamp duty holiday have under three weeks to find a property and submit a mortgage application in order to complete in time – 20 days as of Monday 9th November.
In other words, if you haven't put in an offer on a home and applied for a mortgage by early December, it's highly unlikely you'll qualify for the stamp duty relief. The MoneySuperMarket data shows that two-thirds (63 per cent) of prospective UK buyers are in the market as a result of the scheme and will be seeking to complete their purchase before it ends on 31st March 2021.
If these buyers aren't able to complete by the end of March, 60 per cent have indicated that they will change their buying plans, and 24 per cent will withdraw from the property market completely. The majority – 71 per cent – would like to see the scheme extended to ensure that they can complete in time.
What these figures show, apart from buyers' keen interest in having the stamp duty holiday extended, is just how reliant the property market currently is on house movers rather than first-time buyers. Once the two-third extra influx subsides, the future of UK property is uncertain, especially with the challenges facing first-time buyers. Emma Harvey, director of mortgages at MoneySuperMarket, commented:
'While the stamp duty holiday has brought buyers to the market and lenders have never been busier, challenges still exist for those seeking to buy their first home – not least with regards to the availability of appropriate mortgages. This is why the government is proposing new measures to increase the availability of mortgages for those with a 5-per-cent deposit and we look forward to seeing these proposals in greater detail.
'If you are hoping to move home, it’s important to remember that the larger the deposit you are able to put towards your property, the better. It will bring down your loan-to-value ratio and could give you access to the lower interest rates with lenders. If you’ve been able to save any additional funds during the year, this will certainly be beneficial.'
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