Stamp Duty Increase - First Time Buyers (FTBs)

Digwithit

A couple of questions I wonder if anyone has any thoughts on, or data.

1. Given the SD changes that become active on 1st April will mean that first time buyers won't have any discount on properties over £500k, is there a likelihood that properties currently valued in the say 501-550k range will have a correction downwards rather than risk a shrinking buyer pool? (Or are there not enough FTBs in this price range to have much of an effect?)

1.1. I think there are big backlogs in conveyancing at the moment, so... if one were to have an offer of £520k accepted now and everything else were in place but the process was held up by a solicitor such that completion was delayed until after 1st April, would the solicitor have a liability for that extra Stamp Duty cost? (In this example it would be something like £10-11k)

2. Is it likely that a significant increase in Stamp Duty, such as the imminent one, will have a depressive impact on the market more broadly (particularly at this kind of price range)?

For my own entertainment I calculated the impact to a FTB of buying a property for £500,001 on 1st April (vs one of £500k) and it seems that that last £1 would incur an 'effective' tax rate of 500,000%. Nuts!

HopeAndDriftWood

I can't help with 1 - My instinct is no, most people aren't going to drop the price, but some might if they're keen to sell! 

But 1.1 happened to us during Covid, and it's extremely unlikely that the solicitor would be liable. 

Bookworm105

read the T&C of the solicitor. Almost impossible that they would have been foolish enough to leave themselves open to a time related liability.

GDB2222

Digwithit said:

A couple of questions I wonder if anyone has any thoughts on, or data.

1. Given the SD changes that become active on 1st April will mean that first time buyers won't have any discount on properties over £500k, is there a likelihood that properties currently valued in the say 501-550k range will have a correction downwards rather than risk a shrinking buyer pool? (Or are there not enough FTBs in this price range to have much of an effect?)

1.1. I think there are big backlogs in conveyancing at the moment, so... if one were to have an offer of £520k accepted now and everything else were in place but the process was held up by a solicitor such that completion was delayed until after 1st April, would the solicitor have a liability for that extra Stamp Duty cost? (In this example it would be something like £10-11k)

2. Is it likely that a significant increase in Stamp Duty, such as the imminent one, will have a depressive impact on the market more broadly (particularly at this kind of price range)?

For my own entertainment I calculated the impact to a FTB of buying a property for £500,001 on 1st April (vs one of £500k) and it seems that that last £1 would incur an 'effective' tax rate of 500,000%. Nuts!

1.1:  It's highly unlikely that a solicitor would agree to such a contractual term. So, you would have to show negligence, and that's not going to be at all easy. There are so many parties that have to respond to the solicitor, so it's difficult to show that the solicitor held the process up, rather than other people. 

Besides that, people want low conveyancing fees, which often means a pretty slow service.