1st Time Buyer - Rush to beat Stamp Duty Changes?

green_giant_99

Hey MSE Forum,

I’m a first time buyer looking for a property around the £400-450k mark.

If I rush to complete a purchase before the Stamp Duty changes take effect on 1st April then I will save £7500 (@ £450k). (Obviously that is a very tight timeframe and may not be possible!)

However should I expect that the rush of people looking to complete before April will cause prices to rise before the deadline? Could these price rises offset the Stamp Duty savings?

If prices do rise due to the deadline - will there then be a drop after the changes come into effect?

So my question is - what effect will the stamp duty changes have on prices for properties ~ £425k. Should I rush to try and expedite a purchase or wait and take advantage of potentially better prices after April 1st?

(Or is my logic all wrong and there are other things I need to consider!)

Thanks!

silvercar

The big unknown is interest and therefore mortgage rates.

My eldest bought just before the SDLT reduction and therefore paid more tax, but he did get a very good 5 year fixed rate. My youngest benefited from a lower SDLT but has a higher mortgage interest rate.

EssexHebridean

If you are looking now and hope to find somewhere to buy in the next few weeks, there is a decent chance that you will be able to complete before the change anyway, although obviously this is not certain. Purchasing a freehold property with a short chain gives you the best chance - so for example a probate property (where probate has already been granted) or a landlord selling a property which has previously been rented out (after the tenants have vacated). Get all your ducks in a row - mortgage offer in principle etc - and be ready to move swiftly in response to questions from your solicitor for example along the way. Don’t be tempted to rush into finding somewhere though, you still need to be sure that the property is right for you.

I’d agree that mortgage rates are a bit of an unknown now - we could see them drop a bit following this week’s drop in the base rate, but allowing that there is also a suggestion that inflation may increase again, that could see the base rate rise again. 

good luck! 

Bookworm105

how good is your crystal ball?
know anyone with a proven record of predicting house prices in 5 months time?

here is an empirical evaluation of what happened last time FTB threshold was changed for SDLT
Evaluating the impact of Stamp Duty Land Tax First Time Buyers' Relief

[Deleted User]

green_giant_99 said:

Hey MSE Forum,

I’m a first time buyer looking for a property around the £400-450k mark.

If I rush to complete a purchase before the Stamp Duty changes take effect on 1st April then I will save £7500 (@ £450k). (Obviously that is a very tight timeframe and may not be possible!)

However should I expect that the rush of people looking to complete before April will cause prices to rise before the deadline? Could these price rises offset the Stamp Duty savings?

If prices do rise due to the deadline - will there then be a drop after the changes come into effect?

So my question is - what effect will the stamp duty changes have on prices for properties ~ £425k. Should I rush to try and expedite a purchase or wait and take advantage of potentially better prices after April 1st?

(Or is my logic all wrong and there are other things I need to consider!)

Thanks!

I cannot see that £7500 in stamp duty on a £450k property is going to effect prices.