Impact of the Stamp Duty Holiday Deadline on Housing Market and Home Buyers
The housing market has been seeing a spike of activity despite a global pandemic. In fact, the boost is being credited to the pandemic. Lockdowns and restrictions produced a desire for a dream home that could best accommodate the needs brought about by the pandemic. People desired more space. They wished for private areas to work from home, for children to learn and study, and other areas such as for fitness workouts, home entertainment, and outdoor space that could be enjoyed privately and safely.
Home buyers and home movers began to take interest in the housing market and the best match to their pandemic needs. The low interest rates helped fuel the attention in buying as well. Borrowing was cheap and the areas outside of highly populated areas offered attractive prices.
In an effort to help buyers, the government gave another incentive in the form of tax savings. The stamp duty holiday was announced to help cut buying costs. It was originally set with a deadline of 31 March, 2021. It proved to be a strong motivator for home buyers and the deadline was extended to be reduced by the end of June and end fully on 30 September.
Because the stamp duty holiday deadline was looming, a strong buying month was expected for May and possibly for June. According to recent housing market reports, May home sales reached an all-time high. As reports begin to be released on data from June, it should result in the same due to the rush to buy before the deadline.
The increase in demand in the housing market has caused a problem though, and that is many are being cut off from access to the property ladder. As demand grew, and supply remained low the asking prices grew.
With higher asking prices and the lack of the stamp duty holiday, many first time buyers are having to put buying their dream home purchases on hold. Many believe that despite the closeout of some buyers, the housing market will remain active because pandemic or not, the desire for a dwelling to support the new pandemic lifestyle will be one that continues post pandemic as well.