Home buyers heading for stamp duty holiday disappointment
Research from Purplebricks shows high number of sales could be at risk as it calls on the government to extend the Stamp Duty holiday by 6 – 12 months
- 25% of surveyed first-time buyers are trying to buy because of the Stamp Duty holiday
- And 35% of surveyed home buyers are aiming to complete on a new home before the Stamp Duty holiday ends
- However, 65% of respondents think a property can be purchased (from going on the market to completion) in four months, and a staggering 28% of surveyed 18-34 year olds think this can be done in just one month
- The reality is that, due to pent-up demand and the Stamp Duty holiday, the end-to-end home buying process is taking an average of over six months
- 28% of respondents who are looking to buy a new home because of the Stamp Duty holiday said they wouldn’t be able to get the house that they want if they miss the deadline and 28% said they would have to buy a cheaper house
Purplebricks, the UK’s largest estate agent, has raised concerns that many families who decided to put their house on the market because of the Stamp Duty holiday may have their dreams of moving thwarted.
Its research shows significant numbers of people have been prompted to move due to the government’s Stamp Duty holiday, but many are unaware of the length of time it is currently taking to complete a house sale. Worryingly, if some do not complete in time, they will have to pull out of the home buying process entirely.
Research1 conducted among UK homebuyers (who intend to buy in the next 12 months) revealed the Stamp Duty holiday has meant;
- A quarter of respondents can now move to a bigger property
- 37% of surveyed first-time buyers say they can now afford to buy a house
- 21% of respondents said they can now get a mortgage because they have a bigger deposit
- 25% of surveyed 18-24 year olds say they have a deposit because of the Stamp Duty holiday
While these figures clearly show that the Stamp Duty holiday has delivered the desired boost to the housing market, many buyers are unaware how long the end-to-end buying process is taking to complete in the current climate - which has seen around 40% more instructions than usual in the system:
- Almost 23% of surveyed 18-24 year olds think it will only take up to three weeks
- 28% of surveyed 18-34 year olds think it will only take up to a month
- And a massive 66% of all respondents think it will take up to four months
The homebuying process is currently taking an average of more than 6 months2 from start to finish due to demand caused by lockdown and the Stamp Duty holiday. Recent figures show that up to 200,000 people risk missing out on Stamp Duty savings because of backlogs in the property market.
The research shows that many house moves may be in jeopardy if they do not complete ahead of the Stamp Duty Holiday deadline;
- 37% of respondents who are looking to buy a new home because of the Stamp Duty holiday say they would have to renegotiate the price of the property they want to buy if the sale does not go through by the end of the Stamp Duty holiday
- 28% of respondents who are looking to buy a new home because of the Stamp Duty holiday said they wouldn’t be able to get the house that they want if they miss the deadline
- And 28% said they would have to buy a cheaper house
Vic Darvey, CEO of Purplebricks said: “It is great to see so many people have been encouraged to act on their dream of buying or moving home as a result of the Stamp Duty holiday. However, we’re seeing a hugely busy market with lenders, surveyors and conveyancers facing much higher volumes than usual.
“The hardworking families who were most in need of the Stamp Duty holiday are likely to be the hardest hit if their sale doesn’t complete in time. Purplebricks is calling on the government to extend the Stamp Duty holiday for a further 6-12 months to allow pent-up demand to progress through the system. This is a straightforward fix and will make a real difference to the lives and home-owning dreams of so many people.”