What does the stamp duty holiday mean for the housing market in Hertfordshire?
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The stamp duty threshold has today been increased from £125,000 to £500,000, meaning savings of up to £15,000 for Hertfordshire movers.
Chancellor Rishi Sunak announced the much-anticipated stamp duty holiday as part of a raft of measures designed to keep the economy moving.
He said the average stamp duty bill will drop by £4,500 as a result, with nearly nine out of 10 people buying their main home this financial year now set to pay no stamp duty at all.
The changes will take effect immediately for movers in England and Northern Ireland and will be in place until March 31 next year.
Until today, the stamp duty payable for residential property stood at 2 per cent on homes priced between £125,00-£250,000, 5 per cent on £250,001-£925,000, 10 per cent on £925,001-£1.5m and 12 per cent on the portion above £1.5m.
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Discounts were already in place for first-time buyers up to £300,000 (who then paid 5 per cent on any portion between £300,001-£500,000) as well as a 3 per cent surcharge for second home buyers, which remains unchanged.
In our part of Herts, the savings are likely to be significantly more than £4,500, with the average house price in St Albans and Harpenden being in excess of half a million.
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Buyers in this instance would still benefit from the saving; in the case of a £600,000 property they would pay 5 per cent of the amount above £500,000 - £5,000 rather than £20,000.
Nick Doyle, senior property consultant for Cassidy & Tate in St Albans, said the Chancellor’s announcement was especially good news for those struggling to get onto the property ladder.
“It is immediate and timely as, although we have seen strong activity in the middle to upper end of the market since the end of lockdown, the first-time buyer market has suffered,” he said.
“This saving will in effect bump up the first-time buyer level of deposit and bring in more mortgage products which were previously withdrawn, stifling this end of the market.
“Also, it will help bring more money into the economy as the saving could be alternatively spent on home improvements after the move.”
Rightmove recorded its busiest day ever yesterday (Tuesday, July 7), with 7.7 million visits to the site.
Rightmove’s Miles Shipside said: “Lockdown prevented 175,000 would be sellers from coming to market so we hope this stamp duty holiday will provide the spur for those missing movers to come to market.
“They will find there’s currently record demand for their properties from prospective buyers, with Rightmove enquiries to agents now double what they were before lockdown.”
He warned that movers could now rush to agree a price on their next home “before some sellers put their prices up in the hope people will be able to pay more because of the tax savings”.