Buy to Let Stamp Duty Reduction in Rates
The UK stamp duty holiday is coming to an end on March 31st 2021.
Due to the Coronavirus Pandemic the Chancellor of the Exchequer announced in July 2020 a temporary stamp duty holiday to 0% for all properties £500,000 or under until the cut off date at the end of March 2021. Buy to let and second home stamp duties are reduced but not to 0%. The 3% rate for additional homes still applies. It should be noted that these figures are for England and Northern Ireland only.
Beating the Stamp Duty Holiday Deadline
2021 overall will be a strange year for the property market. The likely 1st quarter spike on completions before 31st March will probably be followed by a reduction into the early part of the 2nd quarter. You can imagine this will be very much the case with first-time buyers as the average saving is going to be £4,500 and this is a significant sum for a first-time buyer. Buy to let is a different market of course and it is difficult to predict what will happen after the stamp duty break end. Naturally, Coronavirus needs to be factored into this well.
Estate Agents have reported this resulted in an increased level of property sales in a lot of areas of the UK. In other areas this holiday will have just maintained transactions to keep the property sector moving. There has been a lot of noise created by various groups that this holiday may be extended. At the time of writing, it doesn’t appear that this is looking likely from the Government.
Impact of Coronavirus
In general, the amount of mortgage lenders products available in 2020 shrank due to the Coronavirus Pandemic. Demand for these products, however, has remained incredibly strong due to the cut in stamp duty. As the product numbers have fallen overall rates have risen slightly despite no changes to the Bank of England base rate.
Buy to let mortgage brokers are very much still in high demand. We are expecting there will be an increase in applications in the next 2 weeks as some look to try and make additional purchases to add to their property portfolio.
Solicitor telephones will be ringing constantly as landlords look to push their property purchases over the line to take advantage of the reduction in stamp duty fees.