70,000 agreed property sales at risk of missing stamp duty deadline

Up to 70,000 property sales agreed in 2020 are at risk of missing the 31 March stamp duty deadline, according to the latest Zoopla House Price Index.

The property expert suggested more sales are in the pipeline this year compared to January 2020, meaning the average time for a sale to complete is up by two weeks compared to an average year, and closer to four months than the usual three.

Zoopla said a “case is growing” for an extension to help buyers who agreed a sale in 2020, and secure the expected savings.

The index also revealed that a normal year would see around 55% of sales agreed in January complete by the end of the first quarter – but the proportion this year is likely to be lower.

“The rush to beat the stamp duty deadline continues and sellers who agreed to buy a home in 2020 would reasonably expect to make the stamp duty saving,” Zoopla research and insight director, Richard Donnell, commented.

“Delays mean we expect up to 70,000 sales agreed in 2020 to miss the deadline meaning the case for a short extension is growing.”

The index stated that increased buyer appetite over the second half of 2020 has been largely attributed to stamp duty relief, but Zoopla also suggested that it is more than the deadline that has motivated home movers.

The property expert said that with more time spent at home as a result of the pandemic, more homeowners have realised their home falls short and have been “galvanised to move”. Rising house prices have also created more equity in people’s homes, adding further impetus – and financial ability – to move.

Data showed that the strength of the sales market in the second half of 2020 saw 47% more sales agreed than the same period in 2019. Zoopla suggested that this absorbed a lot of available supply and means the market is starting 2021 with the total number of homes available ‘for sale’ 6.4% lower than a year ago.

Furthermore, if sellers remain cautious while supply for homes scarce, Zoopla said the choice for those in the market will be limited, which would continue to push house prices higher.

“The housing market momentum built up in 2020 H2 has rolled into early 2021, despite a spike in the pandemic and a third lockdown,” said Donnell.

“Sellers are more cautious however and appear to be waiting for case numbers to drop much further before listing their home, or until we see a return to tier based restrictions.

“The strength of the market in 2020 has eroded the available number of homes for sale and this will mean continued upward pressure on house prices in the short-term. The most affordable parts of the UK are recording the highest rate of price growth for 10 years up to 5.4% a year. We still expect house price growth to slow towards 1% by the end of the year.”

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