The rush to beat the stamp duty deadline is on.
Rightmove says the transaction pipeline shows that more than 550,000 homes are currently going through the completion process, some 25% more than at this time last year.
But the portal is warning that as the April 1 stamp duty deadline looms, London is likely to see the biggest log-jam of first-time buyers trying to complete with affected movers eager to avoid unnecessary extra costs.
There are 28% more first-time buyers in the capital currently going through the completion process than at this time last year, more than any other region.
Many first-time buyers in lower-priced areas won’t be affected at all by the changes, as there is still good availability of homes that will be stamp-duty free.
By contrast, those most affected will be first-time buyers purchasing a home between £500,001 and £625,000 where an extra £11,250 in costs is at stake for this group if the deadline is missed.
Rightmove also expects a conveyancing log-jam as some movers scramble to complete their purchase in time.
Meanwhile the portal says the average price of property coming to the market for sale is up 0.5% this month (+£1,805) to £367,994. After a fast start to the year which saw average asking prices rise by more than usual, February’s price increase is more subdued, below the longer-term average of +0.8%.
“New sellers are showing some pricing restraint after a fast start to the year, being mindful of both the high level of seller competition, and in England also of the looming stamp duty deadline and extra costs for some buyers” explains Colleen Babcock, property expert at Rightmove.
“Agents report that some of the steam is coming out of new sellers’ price expectations to fit the changing market conditions, which is a sensible reaction to attract buyer interest, and it will also help to support activity levels.
“The upcoming stamp duty deadline in England remains a key talking point, and while some movers may not be affected at all, others will be more severely impacted.
“We’ve previously suggested reforms such as regional variations in stamp duty charges to try and address some of the inequities in the current system. With the predicted conveyancing log-jam likely to cause some buyers to miss the deadline and end up paying more tax through no fault of their own, it would seem justifiable for the government to announce a short extension before the end of March.”
This article is taken from Landlord Today