The temporary Stamp Duty Land Tax (SDLT) relief, commonly referred to as the "stamp duty holiday," is scheduled to conclude on 31st March 2025. This relief was introduced to stimulate the housing market by increasing the nil-rate thresholds, thereby reducing the tax burden on property buyers.
Current Stamp Duty Rates (Until 31 March 2025):
Standard Buyers:
- 0% tax on properties up to £250,000.
- 5% on the portion between £250,001 and £925,000.
- 10% on the portion between £925,001 and £1.5 million.
- 12% on any portion above £1.5 million.
First-Time Buyers:
- 0% tax on properties up to £425,000.
- 5% on the portion between £425,001 and £625,000.
- Above £625,000, standard rates apply without first-time buyer relief.
Post-Holiday Stamp Duty Rates (Effective from 1 April 2025):
Standard Buyers:
- 0% tax on properties up to £125,000.
- 2% on the portion between £125,001 and £250,000.
- 5% on the portion between £250,001 and £925,000.
- 10% on the portion between £925,001 and £1.5 million.
- 12% on any portion above £1.5 million.
First-Time Buyers:
- 0% tax on properties up to £300,000.
- 5% on the portion between £300,001 and £500,000.
- Above £500,000, standard rates apply without first-time buyer relief.
For example, a first-time buyer purchasing a property valued at £450,000 before 31st March 2025 would pay £1,250 in SDLT. If the same purchase is completed after this date, the SDLT liability would increase to £7,500.
Given these impending changes, many buyers are attempting to expedite their property transactions to benefit from the current SDLT relief. This rush has contributed to a notable increase in house prices, with the average UK property price reaching £299,138 in January 2025.
If you are considering purchasing a property and want to take advantage of the SDLT holiday, it's advisable to speak to your conveyancer to ascertain whether it would be possible to complete the transaction before 31st March 2025.
What Could Delay My Property Completion?
You should be mindful that there are several factors that could delay your property purchase and prevent you from completing before 31st March 2025:
1. Mortgage Delays
- Lender Processing Times: With many buyers rushing to complete before the deadline, mortgage lenders may take longer to process applications.
- Approval Issues: If your financial situation changes (e.g., job loss, increased debt), your lender may delay or decline your mortgage application.
- Valuation Delays: Lenders require a property valuation, which can take time if surveyors are in high demand.
2. Legal and Conveyancing Delays
- Solicitor Backlogs: Solicitors and conveyancers are likely to be extremely busy, leading to delays in document preparation and property searches.
- Search Delays: Local authority searches can take weeks or even months, especially in busy areas.
- Title Issues: Problems with property ownership, boundary disputes, or planning permissions can cause legal delays.
3. Seller-Related Issues
- Slow Responses: If the seller is not proactive in providing documents or responding to queries, it could slow things down.
- Seller Pulling Out: The seller might change their mind or receive a higher offer from another buyer, delaying or stopping your purchase.
- Property Chain Problems: If your seller is also buying another property, delays in their purchase can hold up your completion.
4. Survey and Property Issues
- Survey Problems: If the property survey reveals structural issues, you may need time to renegotiate the price or arrange repairs.
- Leasehold Complications: If buying a leasehold property, reviewing lease terms or extending leases can take extra time.
5. Market and External Factors
- High Demand: The closer we get to the deadline, the busier estate agents, lenders, and solicitors will be, increasing wait times.
- Unexpected Events: Things like interest rate changes, government policy shifts, or personal circumstances (illness, job change) could impact your ability to proceed.
How to Avoid Delays
1. Get your mortgage agreement in principle early to speed up your full application.
2. Instruct a solicitor ASAP and ensure they start property searches immediately.
3. Have all documents ready, including proof of funds, ID, and any necessary agreements.
4. Consider a chain-free property to reduce dependency on others.
How Can Timms Help?
At Timms, we will do everything possible to help you achieve deadlines but unfortunately some matters are outside of our control.
We aim to keep you updated each step of the way so, if there are any unexpected issues, you can prepare for them in advance. For further information on how we can help you, contact us on freephone 0800 011 6666, visit our conveyancing page or email us at legal@timms-law.com.
