stamp duty word or concept represented by wooden letter tiles on a wooden table with glasses and a book
  • With the Stamp Duty Holiday ending in just over a week, Moneyboat spoke to estate agent Rachel Lansdell to see how people should prepare
  • Rachel provides expert insight on how buyers and sellers will be impacted in addition to wider market impacts
  • Moneyboat also provide insight on how short-term lending could impact buying a home.

The Stamp Duty Holiday will officially end on 31st March, meaning those buying or selling will be impacted depending on what stage in the process they are in. Introduced during the pandemic to boost the housing market, this temporary reduction in stamp duty has allowed buyers to save thousands on property purchases.

For buyers completing transactions after 31st March, the return to standard rates could mean significantly higher costs. With this in mind, estate agent Rachel Lansdell spoke to Moneyboat to provide essential insights into how this change will impact the housing market, offering expert advice for buyers and sellers navigating this transition.

Market Impact: What to expect

Rachel says: “The end of the stamp duty holiday is unlikely to cause a significant drop in property prices. Unlike the COVID-era holiday, where buyers saved tens of thousands of pounds and drove up demand, this current incentive only provided a saving of a few thousand pounds for most buyers.”

However, there has been a noticeable slowdown in new instructions. Rachel explains: “January was incredibly busy, but February saw only a third of the new instructions compared to January, and March has been even quieter. Many sellers are hesitant to list their properties due to limited available options for their next move, leading to fewer new properties hitting the market.”

Negotiation & buyer behaviour

With fewer listings, competition remains high among buyers, meaning sellers are not necessarily more open to negotiation just yet. Rachel adds “I have not seen a significant shift in seller flexibility, but as the market adjusts post-holiday, this could change.”

Financial considerations

For buyers wondering how much more they will need to budget, Rachel advises using the government’s stamp duty calculator on gov.uk, as the amount varies depending on the property price and buyer status (first-time buyer, additional property purchase, etc.).

  • First-time buyers still have access to incentives such as the Lifetime ISA (LISA), which can help towards their property purchase.
  • Budgeting tip: Buyers should ensure they have factored in additional costs such as solicitor fees, mortgage arrangement fees, and potential renovation costs. Creating a detailed budget plan can help avoid unexpected financial strain.

“First-time buyers still have access to incentives such as the Lifetime ISA (LISA), which can help towards their property purchase,” Rachel highlights.

While mortgage availability and lending criteria are not expected to change immediately, all eyes are on the Spring Budget on March 26th, which may introduce new policies affecting the housing market.

For those currently in the process of buying, Rachel recommends:

  • Maintaining regular communication with estate agents and solicitors.
  • Scheduling valuation and survey appointments as soon as possible.
  • Returning documents promptly to prevent unnecessary delays.
  • Accounting for additional stamp duty costs if completion occurs after March 31st. Some buyers are structuring offers to reflect this potential expense.

Some buyers are also structuring offers to account for the additional stamp duty cost. “I recently saw a sale where the buyer negotiated that if the purchase didn’t complete before the deadline, their offer would reduce by the amount of extra stamp duty owed. Fortunately, that sale has now exchanged with completion set for mid-March.”

Post-holiday outlook

The slowdown seen in February and March is expected to reverse later in the spring, especially following the Spring Budget announcement. With a shortage of properties currently available, buyer competition remains strong, which is helping to sustain property prices.

“The stamp duty holiday savings were relatively small compared to past incentives, so we don’t anticipate major shifts in pricing,” Rachel explains. “Instead, we expect a gradual market rebound as we move into the peak spring season.”

Impact of lending on mortgage applications

For those considering buying or saving for a property after the Stamp Duty Holiday, Moneyboat highlights that buyers who have used short-term loans, such as payday loans or high-cost short-term credit, may face additional scrutiny from mortgage lenders.

  • Impact on mortgage applications: Many high-street lenders consider short-term borrowing as a sign of financial distress, which could lead to higher interest rates or even rejected mortgage applications.
  • What to do if you have used short-term credit:
    • Ensure all short-term loans are fully repaid before applying for a mortgage.
    • Obtain a copy of your credit report to check for any red flags.
    • Consider speaking to a mortgage broker to find lenders who may be more flexible.

As the stamp duty holiday ends, Rachel encourages both buyers and sellers to stay proactive and informed. While the market is experiencing short-term hesitations, long-term trends remain stable, with opportunities for both buyers and sellers to make well-timed moves.