The stamp duty holiday has led to a surge in property market activity over the last year. Buyer sentiment has also changed this year as more people searched outside of cities for more space. However, the stamp duty holiday has also reportedly ended up costing many new homeowners more money than they’ve saved, according to experts.
David Hannah, principal consultant at Cornerstone Tax, has discussed why the stamp duty holiday may have cost property owners more money.
UK house prices have hit record highs in recent months, with the latest data from Nationwide suggesting average house prices have risen by 13.4 percent this year – an increase of £22,000.
The maximum saving a buyer could have made on the stamp duty holiday was £15,000.
For a lot of buyers, the introduction of the 95 percent mortgage has meant they do not pay the full price for their home immediately.
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While the stamp duty holiday has allowed buyers to save money on the price of their property, other costs have increased dramatically, almost cancelling out the savings all together.
The cost of moving house has also seen some buyers overpay by thousands.
In the rush to complete their property transactions before the stamp duty holiday deadline, some buyers forgot they needed to be savvy shoppers when it comes to moving home.
Data from property concierge app Moveable shows that some British movers overpaid by thousands or had to borrow money when moving home.
In fact, their research found a shocking 2.4 million movers overpaid by thousands during a house move due to having to rush through or not understanding the process.
Furthermore, 13 percent didn’t budget for extra fees around their home purchase and had to borrow money to cover the extortionate costs.
The average cost of moving house is estimated to be around £8,951, which has given Britons a combined bill of over £10.5billion last year alone.
Mr Hannah said the stamp duty holiday “encouraged and allowed people to move home”.
He continued: “The initial saving was obviously enticing, however, as the holiday and therefore property market gathered momentum, the knock-on effects of this has resulted in an increase of costs for many buyers – rather than the huge savings initially hoped for.
“Of course, a spark in the property market has knock on effects for the rest of the economy – providing work and growth for everyone involved in building, selling, processing and moving people into homes.
“However, growth must be sustainable and stable – and if we want people to really benefit from a better property market, we need more homes that are more affordable to more people – and to avoid a bubble bursting.”
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