Stamp Duty Holiday Ends March 2012

Stamp Duty Holiday Ends March 2012

by Caleb James on 3 Mar, 2012

Time is of the essence if you’re currently considering selling your home, as revealed by September 2011 figures released by Rightmove, the UK’s largest online property portal. The survey is produced from real data representing about 90 per cent of the market in the UK.

The average asking price of a property is up just 0.7 per cent on August and 1.5 per cent from the beginning of the year.  However, for the summer period there was a 3 per cent fall overall.

The average time on the market for a property sale is 94 days and so both buyers and sellers need to move fast to tie up any deals before Christmas.  Sellers should consider their lowest offer in order to entice serious buyers quickly. Furthermore, the stamp duty holiday announced in the Budget 2010 granting exemption from stamp duty, is due to expire on 25 March 2012 so buyers will be extremely keen to complete by then.

Miles Shipside from Rightmove said “New sellers are asking £7,255 less than they were three months ago, trying to strike a balance between maximising their returns and grabbing a buyer in the brief autumn selling season. Many buyers hope to move in before the Christmas break and enjoy their turkey in their new abode. With less than 100 days left before Christmas there’s an opportunity for some deadline focused movers to do their bit to get some action into a market that is still pretty moribund three years after the financial fiascos that precipitated the downturn”.

He continues “It’s a tight but feasible deadline to find and be in a new home for Christmas. The stamp duty holiday relief has more teeth to bite you in the pocket if you miss it, but that is a tasty incentive as long as you beat the deadline. There are a couple of opportunities here to get a sense of urgency into buyers, something that’s been sadly lacking since the collapse of Lehman’s put a seemingly indelible blot in the financial landscape”.

It was just three years ago when Lehman Brothers went down but the market is not much different. In September 2011, there was only a 1.2 per cent rise in new properties coming to the market compared with September 2008.

The Council of Mortgage Lenders indicate that a typical deposit needed for a mortgage is 20 per cent and average new mortgages are around £120,000. For new entrants to the property market, this is a high first rung on the ladder.

Whilst new relaxed planning proposals are a welcome boost for the market in the next few years, it is greater mortgage incentives like the government FirstBuy initiative that are most needed right now.

Overall, the market continues to remain subdued. Mortgage products with higher loan-to-value ratios are holding back market recovery and mortgage deposits required to start or progress in the market mean years of hard saving.

About the Author

Caleb James

Caleb James is a financial advisor and journalist, who contributes regularly to financial blogs and industry publications.