It certainly does appear that the stamp duty holiday has had a profound effect on the property market. The ‘holiday’ was introduced in the early days of the Covid-19 lockdown and has seemingly fuelled a property buying spree across the country. The lower rate of stamp duty means significant savings for homebuyers, and this has led to many choosing to move or buy investment properties over the course of the pandemic.
However, the stamp duty holiday is set to completely end on 30 September barring any changes of heart on the part of the government. There is a great deal of speculation about what this means for the property market, and many homeowners thinking of selling over the coming months are braced for the impact.
Here we take a look at what the end of the stamp duty holiday means for property buyers and sellers, as well as the broader effect on the property market as a whole.
Will there be a market correction?
There can be no doubt that the pandemic has seen a significant rise in the price of properties. According to popular mortgage provider Halifax, house prices rose by an average of £22,000 over the previous 12 months. It would be sensible to assume that this is at least partially due to the stamp duty holiday, and this would indicate things might change when it ends.
Some property market experts are predicting a correction in the market when the stamp duty holiday ends, and this would mean property prices falling to the levels that were seen before the pandemic. However, this isn’t necessarily the case.
A change in requirements
It has also been pointed out that the property market has been changed by the pandemic, and this change looks set to be more permanent than the stamp duty holiday. With the future uncertain with regards to future outbreaks or variants, many homeowners have re-evaluated what they need from their property.
Upsizing has been a trend during the pandemic with more people working from home and wanting to enjoy their extra time at home. With so many people changing their property needs, the demand for property looks set to continue well beyond the end of the stamp duty holiday.
A property market mainly driven by demand
Of course, the issue of demand is absolutely key. And while there can be no doubt that the stamp duty holiday has been a factor on rising house prices, it also cannot be denied that demand for properties has never been higher, and currently that demand outstrips supply. For as long as new buyers are coming to the market, and investors see property as a good way to spend their money, there is unlikely to be any major slip in house prices.
It may be that a small reduction in property prices could occur at the end of September – but as demand for properties remains strong from new buyers, movers and investors, it is likely that the market will not be drastically affected.
Whether you are looking to move quickly in order to beat the stamp duty holiday deadline or you are being more cautious, the team at Foundation Surveyors can provide you with high quality property surveying services. Get in contact with us today to learn about the range of surveys we can offer you to ensure that your property purchase goes as smoothly as possible.