SDLT holiday blues – Homebuyer faces 327% increase in SDLT as final deadline approaches
The latest research by Birmingham estate and lettings agent, Barrows and Forrester, has revealed how higher house prices as a result of the stamp duty holiday will see homebuyers pay 40% more in stamp duty tax when the reprieve is finally removed at the end of September.
Barrows and Forrester analysed house price data and the average cost of stamp duty prior to the holiday’s introduction in July of last year and how this compares to the tax owed on the current purchase of a home.
The research shows that in June 2020, the average house price in England was £250,739, requiring £2,537 to be paid in stamp duty. This has since climbed 8.1% to £270,973, a £20,234 increase in the cost of a property alone.
So while the average homebuyer in England will pay no stamp duty right up until the end of September, any buyer completing beyond this point will not only pay £20,000 more for their home, but they will also face an average SDLT cost of £3,549 – a jump of 40% vs pre-holiday levels.
Largest increase (£)
The South East is home to the largest monetary increase with the average cost of stamp duty climbing from £6,101 in June of last year to £7,714 currently – a jump of £1,613.
The East Midlands is the only other region to see an increase of more than £1,000 in stamp duty costs as a result of the holiday. The average homebuyer was paying £4,589 prior to the launch of the holiday but will now face a cost of £5,604 when it ends this month – a £1,015 jump.
The South West (+£890) and London (+735) are also home to some of the highest jumps in stamp duty costs, with other regions seeing an increase of between £300 to £400.
Largest increase (%)
While London may have seen one of the largest increases in pounds and pence, it equates to just a 5% increase in the cost of stamp duty tax. However, in the North East, a £305 jump in the cost of stamp duty is a 327% increase on the cost previously faced by the average homebuyer (£93).
The North West (37%), South West (30%), Yorkshire and the Humber (29%) and South East (26%) are also home to some of the biggest percentage increases in stamp duty costs.
Managing Director of Barrows and Forrester, James Forrester, commented:
“Much like a Wednesday night out on the town, the stamp duty holiday may have seemed like a great idea for homebuyers when it first launched. However, now that the chance of a saving has all but vanished, many will be left wondering if it was really worthwhile.
It certainly worked wonders in spurring an uplift in buyer demand but the real legacy of the stamp duty holiday will be ongoing market delays and an even larger hurdle to overcome where the affordability of climbing the ladder is concerned.
We’ve seen time and time again how these buyer focussed government initiatives lead to higher house prices while failing to address the issue of supply and, in doing so, more and more buyers will fail to realise their aspirations of homeownership.”
