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Homes in the sales pipeline reach record high ahead of stamp duty holiday deadline

·3-min read
 (Daniel Lynch)
(Daniel Lynch)

Buyers are facing a race against the clock as the number of properties in the sales pipeline reaches a record high ahead of the stamp duty holiday deadline.

Sales of London homes are up by 88 per cent compared to 2019, while the number going through the sales process across Britain is the highest in a decade, according to analysis by Rightmove.

In May 2019, there were 41,719 sales going through in the capital. In May 2021, there were 78,569. Across England, Scotland and Wales, there are 700,000 homes marked Sold Subject to Contract, says Rightmove.

People need to complete their purchase by June 30 in order to qualify to pay no stamp duty on properties up to £500,000. The holiday, previously due to end on March 31, was extended for transactions in England and Northern Ireland in Chancellor Rishi Sunak’s budget earlier this year.

Between July 1 and September 30 the stamp duty nil band rate will be lowered to purchases below £250,000, while the standard limit for relief of £125,000 will return on October 1.

This may not be as relevant for London buyers as there are very few properties available for below £250,000. The average house price of a London home is now £500,000, according to recent ONS figures.

However, most buyers would not be put off by missing either the June or September deadline, according to Rightmove research. Only four per cent of buyers would drop out of the sale, while 53 per cent said they would go ahead as planned. One in four said they would try to renegotiate the price with the seller, while 13 per cent said they would plan to buy a cheaper home.

Despite the stamp duty deadline being a motivator for 29 per cent of buyers, Rightmove found many had other reasons they were choosing to move, with priorities including moving to a bigger home, relocating to the countryside or the coast or acquiring a home with a garden.

Tim Bannister, director of property data, said: “The easing of restrictions, extended stamp duty holiday, better mortgage availability for first-time buyers, race for space and relocation plans have all combined to create the biggest conveyancing logjam we’ve ever recorded over the past ten years.

“We really hope those who had at least four months to make it through to completion will make it in time to beat the first stamp duty deadline, but with the tapering until September many will still make some savings so all will not be lost.”

Of 220,000 sales that are yet to complete, there are 131,000 that are more than £250,000, making this group in most urgent need to get their sale over the line before the end of the month.

First time buyers do not need to worry about stamp duty deadlines. They will continue to benefit from paying no stamp duty on residences priced £300,000 or less, thanks to a law in place since November 2017.

Properties sold for between £300,000 and £500,000 will pay five per cent of the price in stamp duty, while sales over half a million will pay stamp duty at the usual rates.

Paul Kenny, divisional managing director of estate agents Barnard Marcus, said. “Buyer sentiment is very good, irrespective of the Stamp Duty Holiday, as the cost of borrowing is at an all-time low, supported by a selection of great deals being released by mortgage lenders, and particularly for first-time buyers at a higher loan to value.”

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